According to Mizuho analysts, hedge funds are increasingly turning your attention to One tech stock as a short-selling target driven by skepticism around his recent stock performance and growth forecasts.
Analysts at Mizuho said Dell Technologies (NYSE:) has become one of the most talked-about stocks in the technology sector, primarily due to the expected growth in its value due to artificial intelligence servers.
Despite an increase of 26%. In May, largely tied to the short squeeze, Mizuho says many hedge funds are viewing the surge with suspicion, calling Dell an “AI scam.”
Analysts explain that these funds are hesitant to sell SMCI, which is considered a more reliable player in the artificial intelligence server market.
Instead they focus their attention on Dell, questioning the sustainability and profitability of its artificial intelligence growth. Analysts say demand for Dell’s artificial intelligence servers could squeeze its gross margin, casting doubt on its long-term viability.
“The hatred in most HFs I talk to is high and equals or exceeds the hatred for AMD (NASDAQ:),” Mizuho said. “Most believe that the current P/E ratio of 20x is general joke/hoax for a growing hardware company average singles (at best) is in the top spot with a sub-20 GM rating and is at risk from dilutive AI server sales.”
Currently, only 2.6% of Dell shares are shorted, but sentiment among hedge funds is overwhelmingly negative.
“Having been bullish on DELL since its last earnings release, I am concerned that the quarterly guidance could become a ‘news sell’ as [the] stocks increased buyer great expectations just in the last 2-3 weeks,” added Mizuho. As a result, Mizuho is very worried from quarter and positive comments from Dell World will likely be baked into the stock.