News regarding the shrinking PC market is nothing new, as last month's worldwide sales results showed yet again. With each successive report, Dell (NASDAQ:DELL.DL) gets clobbered. Though it's not difficult to understand the pressure on Dell's stock price with each monthly confirmation of the PC's decline, when is enough, enough already?

Dell's fiscal 2013 Q3 announced Nov. 15 was fairly depressing, particularly at first glance. The next day's 6.3% drop in share price pretty much said it all, as long-suffering Dell shareholders expressed their frustrations. But a funny thing happened to Dell on the way to the morgue.

Not all is lost
After the post-earnings sell-off, Dell shareholders are enjoying a steady rise in share price. Even after Nov. 27's 1.5% drop at the open, Dell is up more than 10% since Nov. 16. So why the change in sentiment? I mean, fiscal Q3 is still bad, right? A couple of things stand out and together explain the recent rise of Dell's share price.

Dell currently has a trailing P/E of 6.6, and that's after the share-price jump of 11% over the past two weeks. Industry leaders Microsoft (NASDAQ:MSFT) and IBM (NYSE:IBM), both undervalued in their own rights, trade at more than twice Dell's P/E. What do Microsoft and IBM have to do with Dell? That leads us to another item to consider if you're thinking about adding Dell to your portfolio.

There have been some developments that, to its credit, are adding some credibility to the notion that Dell is successfully expanding its revenue streams -- and leveraging its existing clients -- beyond desktop PCs. It's these developments that will eventually put Dell in the same camps as Microsoft, IBM, and even Oracle (NYSE:ORCL) before too long.

Signs of life
Dell is (finally) taking definitive steps to become a player in software and related services, and, better still, cloud computing. Fiscal Q2 results gave us an inkling of Dell's intentions, and more importantly, results, as it emphasized new technologies and services. Dell's enterprise solutions and services division generated $4.9 billion of the $14.5 billion in total revenue in Q2, a 6% increase compared with fiscal Q1 of 2012.

Dell's most recent quarter was more of the same. In spite of an 11% decrease in fiscal Q3 total revenues, Dell managed to generate $4.8 billion from its ES&S division, flat compared with last quarter, and a 3% increase compared with fiscal 2012. At current rates, ES&S is tracking at nearly $20 billion in revenues for the fiscal year and will account for more than 50% of gross margins. Server and networking, data storage, and services also grew versus a year ago.

The closing of recent acquisitions also indicates that Dell is focused on moving beyond PCs. The Quest Software deal was completed recently, adding to Dell's software services product line, as did its acquisition of enterprise solutions provider Gale Technologies.

Like Oracle, another relatively latecomer to the cloud party, Dell is finally making strides to expand its horizons. In Oracle's case, the impact of waiting to expand revenue lines isn't as dramatic. With hardware already in place with its many customers, Oracle's strategic transition should be easier than Dell's.

As with Microsoft and IBM, Oracle trades considerably higher than Dell, based on trailing earnings. Microsoft and IBM are solidly entrenched in software services and cloud computing, but they're both models of what Dell (and, to a lesser extent, Oracle) is shooting for: diversified technology innovators able to generate both revenues and earnings across multiple, expanding markets.

For value seekers willing to bet on Dell's mid- to long-term success in its transition efforts -- and the past couple of weeks demonstrates there are a few -- Dell's worth a look. In addition to its relative value -- its forward P/E is a minuscule 5.8, by the way -- Dell started paying shareholders a 2.8% dividend last quarter. And lest you're concerned about the impact of the acquisitions and dividends on the balance sheet, Dell is still sitting on nearly $11.3 billion in cash -- more than enough to keep the strategic transition ball rolling.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.