Dell's in the Doldrums

The downfall in Dell(DELL - Cramer's Take - Stockpickr) shares hit a new low Tuesday -- a 52-week low, that is.

For the world's largest maker of computers to hit that dubious level is bad enough, but perhaps more disconcerting is that the stock's plummet from its 2005 high in late July has been as rapid as it has been brutal.

What a difference a quarter makes; Dell shares rode a bullet train higher along with the Nasdaq from May to July on strong results in the first half of the year and high hopes about the second half.

But its momentum went into reverse in mid-July, a day after Intel(INTC - Cramer's Take - Stockpickr), the sole supplier of semiconductors to Dell, sparked a flicker of concern that it wasn't meeting demand requirements of its customers because its factories were at full capacity.

In the subsequent week leading into its own financial report on Aug. 11, Dell shares lost almost 5%.

Then, hurting its own cause, Dell slightly missed Wall Street's second-quarter sales target and offered third-quarter targets below expectations. The company cited errors in pricing its products too low as well as weakness in federal government spending. Since then, shares have dropped another 14% to $33.80.

And far from abating, the selling continues, with shares dropping eight out of this month's 13 sessions.

Often the darling of the tech space for its operational efficiency, Dell has suffered some chinks in its armor this year as it has pushed its business model into markets beyond the computer, such as TVs and digital music players. The law of large numbers is also hurting the Round Rock, Texas-based company, with its growth goals and margin targets coming under increasing scrutiny.

"Wall Street is obviously in the frame of mind that they need to be shown that Dell can do a better job in terms of meeting revenue guidance and expectations," says Bill Gorman, vice president of equity research for PNC Advisors.