Remember when Nvidia’s Jensen Huang handed Dell the ultimate “You da man!” moment back in March? That glowing endorsement to buy Blackwell AI chips from Dell basically attached a turbocharger to their stock, driving it up 89% this year. 

Fast forward to today, and the same stock just belly-flopped (down 13% in pre-market trading after earnings). So what happened? Let’s break it down.

First, the good news. Dell’s AI server game is hotter than a Miami summer. In Q3, their Infrastructure Solutions Group (read: AI moneymaker) sucked in $11.4 billion (a solid 34% increase). They’ve also booked $3.6 billion in AI server orders (because apparently, cloud providers and government agencies can’t get enough Nvidia-powered systems).

Jeff Clarke, Dell’s COO, called AI a “robust opportunity” with “no signs of slowing down.” And he wasn’t wrong. The AI pipeline grew 50%, and even their boring traditional servers saw demand climb by double digits.

But then there’s the PC business, which is aging about as my in-laws 15 year old chihuahua. Revenue in their Client Solutions Group, which includes laptops and desktops, slid 1% to $12.1 billion, with consumer sales plunging 18% to $2 billion. Why? Because nobody’s in a rush to buy a regular ol’ laptop when they know AI-powered machines are just around the corner. It’s like trying to sell CDs when Spotify’s offering a free trial.

The final nail in the coffin came with Dell’s Q4 revenue forecast of $24–$25 billion, falling short of the expected $25.57 billion. Delayed AI server shipments and cautious enterprise spending didn’t help, but Clarke tried to soften the blow, warning that AI growth “will not be linear.” (read: the AI bubble is about to pop). Investors, predictably, panicked (because that’s what they do best) and caused the stock to tank by 10% after hours and another 13% this morning.

Despite being moved from the “cool kids table” at lunch, some analysts are sticking with Dell. Goldman Sachs upped its price target to $165, calling the stock’s drop “overdone.” Bernstein echoed that sentiment, betting on Dell’s AI future.

Here’s the big question: Is Dell a buy-the-dip candidate or a lesson in overhyping AI? Sure, the AI pipeline looks promising, but with PCs dragging them down and Nvidia’s next-gen chips running behind schedule, Dell’s future feels like my local weatherman’s forecast (there’s a 50% chance of rain).

If they’re smart, Dell should double down on AI and take the PC biz behind the barn and shoot it (as Mr. Wonderful says).

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Stock.News has positions in Dell.