We recently published a list of Insiders are Selling These 10 AI Stocks. Since Dell Technologies Inc (NYSE:DELL) ranks 8th on the list, it deserves a deeper look.
Positive sentiment is prevailing in the market after strong bank earnings and increasing hopes of a soft landing. Ryan Detrick, Carson Group chief market strategist, said while talking during a recent program on CNBC that he sees more runway for the current bull market.
“This is a bull market. Now we’re in the third year of a bull market. My friend Sam Stovall said once you get to 65 years old, the odds of getting to 85 are really, really high. Bull markets work that way. Going back 50 years, there’s five other bull markets that made it into their third year, like this one is right now. The worst any of them went was another three years. A five-year total. The average was eight years. I’m not saying we have another six years of a bull market but what we’re saying is this is an economy that keeps surprising to the upside.”
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However, the analyst said large-cap tech stocks are “pricey.” He believes small- and mid-cap stocks are cheap and labeled financials and industrials as fairly valued.
There are some top AI stocks that are seeing insider selling activity. In this article, we take a look at those stocks and analyze their fundamentals and market sentiment. With each company, we have mentioned its hedge fund sentiment. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Dell Inc (NYSE:DELL)
Number of Hedge Fund Investors: 88
On September 26, 2024, Dell Inc (NYSE:DELL) CEO Michael S. Dell sold 10 million shares at $122.40 per share, reducing his ownership by 35% to 18,292,241 shares. The transaction was valued at approximately $1.224 billion. The stock is down 3.8% since then.
UBS recently listed Dell Technologies Inc (NYSE:DELL) as one of the top tech stocks to own for the end of 2024.
UBS believes Dell Technologies Inc’s (NYSE:DELL) emerging strength in AI-focused servers and a refresh cycle for PCs are being supported by better pricing. Dell recently reported second-quarter results that topped estimates.
Bill Baruch, founder and president at Blue Line Capital, said in an interview with CNBC that there were margin concerns in the previous quarter report but in the latest results we saw “significant” margin improvement in the infrastructure solutions group which holds the AI server subsegment. This subsegment saw about 80% year-over-year growth.
“This was a great report. It’s everything we wanted to see.”
The analyst said that the stock could reach $134 by the end of this year.
Dell Technologies Inc (NYSE:DELL) got attention when Elon Musk said on Twitter that the company, along with Super Micro Computer, would make servers for his AI startup xAI. But Dell is expanding its partnerships with other companies, too. In just a few quarters, AI servers have surged to account for 12.4% of total revenue, up from 2.2% three quarters ago. Dell Technologies Inc (NYSE:DELL) closed the quarter with a record $3.8 billion backlog, which is impressive. In May 2024, Dell expanded their AI factory with Nvidia to include the new PowerEdge XE9680L server, as well as storage, edge, and workstation solutions.
Carillon Scout Mid Cap Fund stated the following regarding Dell Technologies Inc. (NYSE:DELL) in its Q2 2024 investor letter:
“Dell Technologies Inc. (NYSE:DELL) was a top contributor despite reporting disappointing first-quarter earnings results, because investors looked through the near-term disappointment and expected strong growth from AI-related servers and personal computers. We expect Dell to participate in the growth of artificial intelligence hardware, especially as enterprises invest more aggressively. We like the company’s depth and breadth of products and services, as well as its focus on keeping costs low.”
Overall, DELL ranks 6th on Insider Monkey’s list titled Insiders are Selling These 10 AI Stocks. While we acknowledge the potential of Dell Technologies Inc (NYSE:DELL), our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DELL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.