Cramer explains why Dell is an “incredible bargain” here

CNBC’s Jim Cramer told investors Tuesday why he thinks that would be good to buy some shares of della at the current price, saying it’s an “incredible bargain”. And while tech stocks took a hit on Tuesday, he said the AI ​​thesis was “still very much intact.”

“You have to stay focused on the secular trends that will ultimately drive the company’s success, not the quarterly noise, the time specifics that just don’t matter in the long run,” Cramer said. “That’s not to say you should buy them all at once right here—remember, September tends to be an ugly month—but you absolutely have my blessing to start a Dell fast.”

Dell beat Wall Street expectations and raised its full-year guidance last week. The company’s success was driven by an 80% increase in AI server sales, rising from $1.7 billion in the previous quarter to $3.1 billion. This quarter is a significant turnaround from the May report, where the stock fell 18% as investors worried about lower-than-expected AI server stock. The company appears to be well-positioned as the AI ​​boom continues, not least because its servers can handle Nvidia’s popular chips — the AI ​​giant’s CEO, Jensen Huang, said earlier this year that “no one is better when building very large end-to-end systems. enterprise scale than Dell.”

Cramer was impressed by Dell’s infrastructure margin improvement and management’s assessment of its artificial intelligence business on the conference call. He also pointed out that the company has indicated that it expects the PC business to grow by the end of the year.

While some investors may have been wary when Dell indicated that AI sales could fall slightly when the company next reports, Cramer said he doesn’t share those concerns. The management stated that the slowdown could occur not because of a lack of demand, but because of a lack of supply. This “link in the supply chain” may affect the current quarter, Cramer said, but only because the company has delayed sales to later this year or next year.

“Finally, there were mixed views on Dell’s quarter because while the company had excellent results, including their AI margins, we also had some noise around the specific timing of new AI server shipments in the back half of the year. ” he said. “But I think those concerns are just that: noise.”