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Dell shares surge after earnings as investors rotate to lower multiples
On Sept. 2, Dell’s earnings prompted a close up 16% to $49.2, with Jim Cramer pointing to a lower than 20 times earnings valuation and a projected $25 per share earnings power.
Yahoo Finance reports that on its September 2 episode of Mad Money, Jim Cramer focused on Dell Technologies after the company’s earnings, saying “big money” has been moving away from high price to earnings multiple stocks toward lower-multiple names like Dell.
Cramer attributed the reaction to Dell being priced at less than 20 times earnings and to investors gaining confidence in Dell’s ability to earn about $25 per share after the results, which he said helped support the stock’s move.
He also said the market’s concern about how much customers could make using NVIDIA technology has eased, adding that Dell is benefiting from demand tied to NVIDIA equipment.
Cramer further pointed to supply chain execution, noting that getting enough NVIDIA chips remains a challenge in the data center business, and that he connected Dell’s strength to improved deliveries and scale.