TLDR
- Dell jumped 5.4% after-hours after Super Micro Computer (SMCI) reported Q4 gross margins of 15–17%, far above its prior guidance of ~8.4%
- SMCI’s total new orders exceeded $60 billion in the quarter, hitting record backlog levels
- Dell trades around $404, with a DCF model pointing to an intrinsic value of ~$571 — a 29.3% discount
- Dell’s P/E sits at 31.1x, below its peer average of 52.5x and Simply Wall St’s fair estimate of 55.4x
- Dell has returned 815.2% over five years and 229.2% over the past year
Dell Technologies (DELL) stock moved 5.4% higher in after-hours trading on Monday after AI server peer Super Micro Computer (SMCI) dropped a preliminary Q4 FY2026 business update that the market treated as a green light for the whole AI infrastructure space.
Super Micro Computer, Inc., SMCI
SMCI said its gross margins for the quarter ended June 30, 2026 came in at an estimated 15–17%. That’s a dramatic jump from prior guidance of around 8.2–8.4%. The company attributed the beat to a favorable customer and product mix.
Dell wasn’t the only one to catch a lift. Hewlett Packard Enterprise also moved higher as investors rotated into AI infrastructure names following the SMCI update.
SMCI’s backlog climbed to record levels during the quarter, with total new orders topping $60 billion — a number that signals the appetite for AI-optimized infrastructure isn’t cooling off.
During the regular session, Dell traded in a range of $393.94 to $407.98. The S&P 500 and Dow Jones each slipped fractionally on the day, and the Nasdaq edged slightly lower, making Dell’s after-hours pop stand out even more.
Is Dell Undervalued?
Beyond the after-hours move, a fresh valuation analysis from Simply Wall St puts Dell’s intrinsic value at roughly $571 per share using a two-stage Discounted Cash Flow model. With the stock trading around $404, that implies a discount of about 29.3%.
The DCF model starts from Dell’s latest twelve-month free cash flow of approximately $9 billion and assumes continued growth from there. Dell passes 5 out of 6 valuation checks on the platform, which the analysts describe as a “broader valuation picture that still leans cheap.”
On a price-to-earnings basis, Dell trades at about 31.1x. That’s above the broader tech industry average of 22.2x, but well below the peer average of 52.5x for companies tied closely to AI infrastructure. Simply Wall St’s fair P/E estimate for Dell sits at 55.4x, suggesting the stock still looks inexpensive on earnings even after its big run.
What the Bears Are Watching
Not everyone is convinced. The bear case flags cloud migration and SaaS adoption as ongoing headwinds for Dell’s core on-premise infrastructure business. The concern is that the current AI-driven server surge may mask longer-term structural pressure on hardware demand.
The bull case, meanwhile, points to Dell’s expanding enterprise AI customer base and integrated AI factory solutions as drivers of both revenue visibility and margin improvement.
Dell has returned 229.2% over the past year and 815.2% over five years.
The after-hours session saw Dell trading well above its regular-session high of $407.98, with the stock up 5.4% on the back of SMCI’s record order backlog and margin surprise.
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