We recently compiled a list of the Jim Cramer’s Bold Predictions About These 15 AI Stocks. In this article, we are going to take a look at where Dell Technologies Inc. (NYSE:DELL) stands against the other AI stocks.

With the first quarter of 2025 well underway, Jim Cramer hasn't been short of comments on artificial intelligence. AI stocks, which entered 2025 with optimism and tailwinds were dealt a shock during January's DeepSeek selloff. The selloff was centered around stocks of firms that investors believe stand to benefit from billions of dollars in AI GPU spending.

The firm that led the DeepSeek selloff was the AI GPU stock that has been Wall Street's favorite. Its shares dropped by 17% during the day and are flat year to date after having gained 17% since the selloff. Cramer has also been one of the firm's biggest fans. For instance, consider his remarks made in January before the selloff. Cramer started out by bemoaning a lack of knowledge about the firm and shared:

"Okay, some of the analysts are good, but some of the analysts are just talking about the quarter! And these are people, who are, they are bound by the four walls of idiocy. This is one of the greatest companies in the world, these people want to buy sell, buy sell, they don't recognize that [the firm] is doing things that are just running circles around."

In fact, Cramer went as far as to suggest that the firm was ushering in an industrial revolution. According to him:

"Industrial revolution, why can't we believe? Do you remember, did you read that, book about John Garfield, where they talked about the telephone, and Alexander Graham Bell tries to get it into the centennial in Philadelphia, and only because the Brazilian guy there doesn't get to represent it. And Alexander Graham Bell says you know this could revolutionize all of how we do things. And the American judges were like who is this clown?"

"I find over and over again that when you have the industrial revolutions no one really believes in them. And here's Jensen Huang. The other day someone said to me, I see you're like Jensen Huang, you guys both were dishwashers. And I said, I was a busboy. I mean the kinds of things I'm seeing with people at [the firm]. How's your dog doing? My dog died three years ago, should I sell the stock? Heaven forbid they listen to Colette Kress, who is not going to give you the numbers that you want."

However, the CNBC TV show host had to naturally adjust his expectations after investors re-calibrated their AI GPU spending. Appearing on Squawk on the Street the day after the selloff, he shared two factors that would be key in determining the future of AI stock performance. According to Cramer, these factors are energy spending and GPU orders. Investors have focused on energy stocks, particularly those that deal with nuclear energy -  a fact that has sent some stocks to gain as much as 140% over the past year. As for GPU orders, the Q4 2024 earnings season has seen big tech firms persist in their multi-billion dollar AI capital expenditure commitments.

In another morning appearance, Cramer also commented on an outfit he had discovered that was better than DeepSeek. He shared:

“Now there’s an outfit that I’ve been dealing with called you dot com. . . .I really like you dot com. It’s one of those companies that is really ahead of DeepSeek, it’s way ahead."

He added that after digging deeper, he found that the AI GPU firm mentioned above was actually this outfit's largest investor. The investment signaled to Cramer that there are alternatives better than DeepSeek as he commented that "the long knives came out" for it at the slightest hint of trouble.

Our Methodology

To compile our list of Jim Cramer’s bold predictions about AI stocks, we scanned the stocks he mentioned in Mad Money and Squawk on the Street as far back as September 2024. Then, we picked out stocks with AI computing, hardware, and energy generation exposure, and ranked them by the number of hedge funds that had bought the shares in Q3 2024.

For these stocks, we also mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds invest in? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).

A team of IT experts discussing the latest network security trends over a laptop screen.

Dell Technologies Inc. (NYSE:DELL)

Number of Hedge Fund Holders In Q3 2024: 60

Date of Cramer’s Comments: September 4th, 2024

Performance Since Then: 4.9%

Dell Technologies Inc. (NYSE:DELL) is a computer hardware company that caters to the AI data center industry by providing server racks and other associated equipment. Naturally, this dependence exposed the firm to AI spending and led to a 12% drop in November when the firm's Q3 revenue missed analyst estimates. Dell Technologies Inc. (NYSE:DELL) shares also dropped by 8.7% in January amidst the DeepSeek selloff, but the shares have gained 10% in February on the back of positive news such as Elon Musk's xAI inking a $5 billion AI server deal with the company. Here's what Cramer commented in September:

"This story is all about Dell making servers for the data centers that power artificial intelligence, along with new lines of AI-infused PCs. Unfortunately, the numbers were somewhat confusing, but I think that Wall Street got this one right—at least initially—as the stock timely rallied more than 4% last Friday before giving back all those gains today. Yep, Dell's still worth owning here, and I'm going to tell you why. Let's start with the numbers: Dell delivered a meaningful revenue beat driven by 38% growth from its Infrastructure Solutions division. Much better than expected, mostly thanks to heavy investment in AI infrastructure by corporate clients. In fact, their server and networking sales were up 80% year-over-year."

"Dell's other business, the Client Solutions Group, which includes the PC business, came in a little light, but not light enough to offset the strength in the infrastructure side. In the earnings release, Dell Vice Chairman and COO Jeff Clarke, an old hand, explained that 'our AI momentum accelerated in Q2, and we've seen an increase in the number of enterprise customers buying AI solutions each quarter.' Notice the word 'solutions'—I think that's really important. It's more than just a box. He added that AI-optimized server demand jumped by 23% compared to the previous quarter."

"Now, last time Dell reported, some investors didn't like the margins from Dell's infrastructure business. Long story short, their earlier AI hardware sales mainly came from selling servers to large hyperscalers—here we're thinking about Alphabet, Amazon, Meta—and those companies can drive a hard bargain. Dell was confident that the margins would improve later on as they sold more networking and storage equipment along with services, but hardly anyone was willing to give them the benefit of the doubt. Except me, maybe. That's because I saw that Jeff was with Jensen—of course, Jensen Huang, CEO of Nvidia—at the GTC conference I attended."

Overall DELL ranks 11th on our list of the AI stocks Jim Cramer recently talked about. While we acknowledge the potential of DELL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DELL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

 

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap

 

Disclosure: None. This article is originally published at Insider Monkey.