TLDR
- Jim Cramer advised investors to sell Super Micro Computer and buy Dell Technologies during his lightning round
- Dell Technologies beat revenue and earnings expectations in Q2 with $29.8 billion in sales
- The company launched the PowerEdge XR8720t server in October, sending shares up 9% on the announcement
- Analysts expect fiscal Q3 earnings of $2.25 per share, representing 17.2% year-over-year growth
- DELL stock has returned 32.4% over the past 52 weeks, outperforming the S&P 500 by nearly 14 points
Jim Cramer doesn’t mince words when it comes to the AI server market. During a recent lightning round, the Mad Money host told a caller asking about Super Micro Computer to dump the stock and buy Dell Technologies instead.
“Buy Dell, sell SMCI,” Cramer stated plainly. He pointed to ongoing accounting concerns at Super Micro as his main reason for the recommendation.
This wasn’t the first time Cramer has expressed preference for Dell over its competitor. On September 8, he reiterated his stance on the stock.
“I can’t because it’s still got those accounting issues, and I think accounting regulations equal sell,” Cramer said at the time. He added that he would be a buyer of Dell despite the departure of its CFO.
The timing of Cramer’s comments comes as Dell Technologies prepares to report fiscal third-quarter earnings on November 25. Wall Street expects the Round Rock, Texas-based company to post earnings of $2.25 per share.
That would represent a 17.2% increase from the $1.92 per share reported in the same quarter last year. Full-year earnings are projected to reach $8.66 per share, up 15.8% from fiscal 2025.
Strong Performance and Product Innovation
Dell has been on a tear lately. The stock has gained 32.4% over the past 52 weeks.
That crushes the S&P 500’s 18.4% return during the same period. It also beats the Technology Select Sector SPDR Fund’s 29.8% gain.
The company delivered solid results in its most recent quarterly report. On August 28, Dell posted adjusted earnings of $2.32 per share on revenue of $29.8 billion.
Both figures topped analyst expectations. However, shares still dropped 8.9% the following day as investors digested the results.
Dell’s latest product launch has generated real excitement. The company unveiled its PowerEdge XR8720t server on October 8.
The new server handles demanding telecom and edge workloads on a single platform. It’s designed to simplify infrastructure and enable AI-driven tasks.
Analyst Confidence Remains High
The announcement sent shares soaring more than 9%. The global rollout is scheduled for the first quarter of 2026.
Wall Street remains bullish on the stock heading into earnings. Out of 22 analysts covering Dell, 15 rate it a “Strong Buy.”
Two analysts recommend a “Moderate Buy” rating. Five suggest holding the stock.
The average price target sits at $164.95. That implies upside of just 1.7% from current levels, though some analysts see more room to run.
Dell has a solid track record of beating expectations. The company has exceeded consensus estimates in three of the last four quarters.
Looking ahead, analysts project fiscal 2027 earnings of $10.44 per share. That would mark a 20.6% increase from expected fiscal 2026 results.
Dell expects full-year revenue between $105 billion and $109 billion based on guidance provided in August.
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