Dell Technologies experienced a significant stock decline from $168 to $110, which Jim Cramer attributed to irrational market behavior rather than business issues. He highlighted that Dell's fundamentals remained strong, citing stock buybacks, substantial AI server revenue growth, and a competitive advantage in vendor financing. Dell repurchased 54 million shares and returned $7.5 billion to shareholders. Its AI-optimized server revenue reached $8.95 billion, with a backlog of $43 billion. Competitors HP Enterprise and Supermicro lack the balance sheets to offer vendor financing at scale, giving Dell an edge.
"Cramer pointed to three specific reasons Dell deserved better than what the market gave it. First, Dell bought back a significant amount of stock during the decline. That's not a company in distress. Dell repurchased approximately 54 million shares in FY26 and returned a record $7.5 billion to shareholders for the full year."
"Second, Dell's servers had become the principal way for businesses to buy Nvidia chips. In Q4 FY26, Dell's AI-optimized server revenue hit $8.95 billion, up 342% year-over-year. Full-year AI server orders came in at over $64 billion, with a record $43 billion backlog entering FY27."
"Third, and most underappreciated: Dell's two major competitors, HP Enterprise and Supermicro, don't have clean enough balance sheets to offer vendor financing at scale. Dell can, and does. When a company is buying millions in AI server equipment, vendor financing is a genuine competitive advantage."
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