(Updated with fresh stock quote)

Dell's ( DELL) analyst day may not have delivered the warm afterglow investors were hoping for, but the tech bellwether could still offer plenty of upside, even in a difficult economy.

Dell shares fell after the Round Rock, Texas-based firm Tuesday after the firm forecast a decline in its gross margins and warned that IT spending will not rebound until 2010.

After months of economic doom and gloom, this was hardly music to the ears of investors desperate for good news. Dell, like IBM ( IBM) and Intel ( INTC), is a key indicator of the health of the tech sector, and, as a major PC maker, is a good barometer for consumer confidence.

Dell's Day of Reckoning

At least one analyst, however, feels that Dell's vital signs are plenty strong and described Tuesday's selloff as an over-reaction that could ultimately benefit shrewd investors.

"Specifically, we quantify the impact from lower gross margin as only a small 1 cent to 2 cents hit to EPS in the July quarter," wrote David Bailey, an analyst at Goldman Sachs, in a note released Tuesday. "We are reiterating our 'Buy' rating and view the undue selling post the analyst day as an attractive entry point."

Dell's shares rallied slightly Wednesday, rising 34 cents, or 0.58%, to $12.04, as the Nasdaq gained 2.49%. Despite rising steadily since March, the company's stock is trading well below its 52-week high of $26.04. This time last year, for example, Dell shares were changing hands for more than $22.

Even Dell's margin pressures should eventually approve, according to Bailey.

"Although firming component costs caught Dell by surprise in the second quarter, the company should have more time to adjust pricing in the third quarter to mitigate the pressure on margins," he said. "Seasonally better demand, a higher mix of revenue from large enterprise and SMB customers, and higher volumes from a corporate upgrade cycle likely in 2010 should drive improved margins."

Not all analysts, however, are as bullish on Dell in the aftermath of its analyst day.

"We would wait to buy shares of Dell due mostly to macro-economic headwinds and uncertainty concerning the timing, magnitude of a PC/client replacement cycle," wrote Jayson Noland, an analyst at R.W. Baird, in a note released Wednesday. The analyst maintained his 'neutral' rating for Dell, but admitted that the firm's valuation is attractive at its current levels.

Like many tech firms, Dell has taken its share of body blows during the economic downturn, but says that global demand for its products is now starting to stabilize.

Stabilization, however, should not be confused with "rebound." Dell CFO Brian Gladden described a mixed spending landscape Tuesday, where strength in consumer and public sector is offset by weaknesses in large enterprises and SMBs. Globally, Western Europe remains a tough place to sell technology whereas Asia is improving, he added.

The company was less forthcoming on its acquisition plans, with CEO Michael Dell unwilling to get into specific details of the company's M&A strategy.

One name that cropped up time and again, though, was that of storage specialist EqualLogic, which Dell bought for $1.4 billion last year. Dell explained that EqualLogic is now four times larger than when the company was acquired, and there has been speculation that the firm may be planning another foray into the storage market.

"We believe the company prefers higher-margin solutions around software, services and enterprise hardware to offset the cyclical, low-margin PC/client business," wrote Noland. "We expect continued speculation around Commvault ( CVLT) specifically."

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