Dell and IBM are two industry giants that have been left behind in the AI boom, but they look primed to take off.

Published Date: 30/08/2024

Dell and IBM are two industry giants that have been left behind in the AI boom, but they look primed to take off.

The artificial intelligence (AI) space is on fire, with many stocks skyrocketing in recent years. However, not all AI stocks have been lifted by the rising tide. Two top-notch AI stocks, Dell and IBM, have been left behind, offering astute investors a chance to grab some promising AI stocks at bargain-bin prices.

Dell is an undervalued gem in the AI hardware market. The company is a leading maker of cost-effective AI training computers with advanced cooling systems. Despite its strong position in the market, Dell's stock has only gained 133% since the summer of 2022, far behind its peers. The stock trades at affordable valuation ratios, and the company is generating robust cash profits.Moreover, Dell has a backlog of unfilled AI orders worth $3.8 billion, which is about two full quarters' worth of system orders -- and the backlog is growing. So, Dell offers a low-priced stock with tremendous growth opportunities in the AI surge. And these shares look ready to run.

IBM, on the other hand, is an overlooked enterprise AI giant. The company has a flawless pedigree in AI circles, having been knee-deep in AI research since the 1990s. IBM leads the annual list of global AI patent applications and provides a unique portfolio of business-class AI tools. Despite its strong position in the market, IBM's stock has gained just 52% in two years and trades at 14 times free cash flows.IBM may have looked a bit slow out of the AI gate, but the company is building a rock-solid deal portfolio that should drive game-changing financial results in the long run. The company's long and painful transformation from a leading one-stop shop for corporate computing needs to a tightly focused expert in hybrid cloud software and services is about to pay off in a big way.

Both Dell and IBM look like great buys in the AI space. They offer a unique combination of strong fundamentals, affordable valuations, and tremendous growth opportunities. So, if you're looking to get in on the AI boom, consider adding these two stocks to your portfolio.Dell and IBM are both established players in the tech industry, with a long history of innovation and excellence. Dell is a leading provider of computer systems and services, while IBM is a multinational technology and consulting company.Dell's AI systems revenues have more than doubled from the fourth quarter of fiscal year 2024 to the first quarter of 2025. The company has a backlog of unfilled AI orders worth $3.8 billion, which is about two full quarters' worth of system orders -- and the backlog is growing.

IBM has a unique portfolio of business-class AI tools, including Watson, its flagship AI platform. The company has also made significant investments in AI research and development, and has a strong track record of innovation in the field.Both Dell and IBM are well-positioned to benefit from the growing demand for AI solutions. They offer a unique combination of strong fundamentals, affordable valuations, and tremendous growth opportunities. So, if you're looking to get in on the AI boom, consider adding these two stocks to your portfolio.

FAQS:

Q: What is artificial intelligence (AI)?

A: Artificial intelligence (AI) refers to the development of computer systems that can perform tasks that typically require human intelligence, such as learning, problem-solving, and decision-making.

Q: Why are AI stocks soaring in price?

A: AI stocks are soaring in price due to the growing demand for AI solutions across various industries, including healthcare, finance, and technology.

Q: What makes Dell an attractive AI stock?

A: Dell is an attractive AI stock due to its strong position in the AI hardware market, affordable valuation ratios, and robust cash profits.

Q: Why is IBM an overlooked enterprise AI giant?

A: IBM is an overlooked enterprise AI giant due to its slow and painful transformation from a leading one-stop shop for corporate computing needs to a tightly focused expert in hybrid cloud software and services.

Q: What is the growth potential of AI stocks?

A: The growth potential of AI stocks is significant, driven by the growing demand for AI solutions across various industries and the increasing adoption of AI technologies.

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