Dell's AI Server Boom: Soaring Forecasts Amid Margin Pressures

Dell Raises Annual Forecasts on Strong Demand for AI Servers

Dell Technologies Inc. boosted its annual outlook and posted quarterly sales and profit that topped analysts' estimates, building on continued strong demand for artificial intelligence servers that power an expanding fleet of data centers. Earnings, excluding some items, will be about $9.55 a share in the fiscal year ending in January, an increase from a May forecast, Texas-based Dell said Thursday in a statement. The company raised its annual sales projection to about $107 billion from about $103 billion. Analysts, on average, projected profit of $9.43 a share on revenue of $105.2 billion.

Dell lifts annual forecasts on AI server sales boom

Aug 28 (Reuters) - Dell Technologies (DELL.N), opens new tab raised annual revenue and profit forecasts on Thursday, buoyed by demand for its artificial intelligence-optimized servers that are powered by Nvidia's (NVDA.O), opens new tab advanced chips. Rising demand for AI servers, capable of handling computational needs of AI workloads, including training large language models, is benefiting companies such as Dell and Super Micro Computer (SMCI.O), opens new tab. Dell now expects $20 billion in fiscal 2026 revenue from AI server shipments, up from its prior forecast of $15 billion. Its AI servers are used by customers, including Elon Musk's AI startup xAI and CoreWeave (CRWV.O), opens new tab. The company raised its annual revenue forecast to be between $105 billion and $109 billion from its earlier expectations of $101 billion and $105 billion. Dell expects adjusted earnings per share of $9.55, up from its prior projection of $9.40. Third-quarter revenue forecast of $26.5 billion to $27.5 billion was above analysts' average estimate of $26.05 billion, according to data compiled by LSEG. Adjusted profit forecast for the quarter of $2.45 per share was below estimates of $2.55 per share. Revenue for the second quarter came in at $29.78 billion, beating estimates of $29.17 billion. Excluding items, it reported adjusted profit of $2.32 per share, slightly beating estimates of $2.30 per share. Dell's revenue for the infrastructure solutions group, which includes its storage, software and server offerings, rose 44% to $16.80 billion, while the client solutions group - home to PCs - grew 1% to $12.50 billion. A strong PC refresh cycle is expected after Microsoft (MSFT.O), opens new tab ends support for Windows 10 in October, as users seek to maintain security and access to the latest features, boosting demand for PC makers such as Dell and HP. HP beat analysts' estimates for third-quarter revenue on Wednesday, helped by the adoption of AI PCs and the Windows 11 upgrade cycle. Reporting by Jaspreet Singh in Bengaluru; Editing by Vijay Kishore Our Standards: The Thomson Reuters Trust Principles., opens new tab

Dell slides after weak margins eclipse upbeat full-year forecast

Aug 29 (Reuters) - Shares of Dell Technologies (DELL.N), opens new tab dropped nearly 6% in premarket trading on Friday, as a dour quarterly profit forecast and weaker-than-expected second-quarter margin rate overshadowed upbeat full-year estimates. Rising demand for servers capable of handling computational needs of AI workloads is benefiting companies such as Dell, Hewlett Packard Enterprise (HPE.N), opens new tab and Super Micro Computer (SMCI.O), opens new tab, but the high cost of producing them and tough competition have pressured margins. The company prioritized fulfilling AI server orders over maintaining margins, as supply chain disruptions and expedited shipping costs added to the profit squeeze from competitive pricing strategies aimed at landing large customer contracts, J.P. Morgan analysts wrote in a note. Adjusted gross margin rate for the second quarter fell to 18.7% from a year earlier and missed estimates of 19.6%. The company forecast third-quarter adjusted profit of $2.45 per share, falling short of analysts' estimates of $2.55 according to data compiled by LSEG. Dell expects third-quarter revenue to be in the range of $26.5 billion to $27.5 billion, compared with estimates of $26.05 billion. Separately, Dell raised its annual revenue forecast to between $105 billion and $109 billion from its earlier expectations of $101 billion to $105 billion, buoyed by demand for its AI-optimized servers It also raised its adjusted earnings per share guidance to $9.55 from its prior projection of $9.40. Shares were last down 5.8% at $126.3, having rallied more than 16% so far this year as of last close. Dell's shares trade at 13.2 times profit expectations, higher than HPE's 10.8, but far lower than 22.3 for the S&P 500 index (.SPX), opens new tab. Rival Super Micro trades at around 16.3 forward earnings. Reporting by Shashwat Chauhan and Akash Sriram in Bengaluru; Editing by Krishna Chandra Eluri Our Standards: The Thomson Reuters Trust Principles., opens new tab

Dell slides as high AI server costs, competition blunt upbeat demand forecast

Aug 29 (Reuters) - Shares of Dell Technologies (DELL.N), opens new tab fell about 7% premarket on Friday, as high manufacturing costs for AI-optimized servers and intensifying competition overshadowed the company's bullish demand forecast for artificial intelligence infrastructure. The stock is set to lose roughly $5 billion of its $91 billion market capitalization if premarket losses hold. AI server demand remained a bright spot for the company. Dell raised its annual shipment forecast to $20 billion from $15 billion, citing strong orders from customers including Elon Musk's xAI and cloud provider CoreWeave (CRWV.O), opens new tab. Dell prioritized fulfilling AI server orders over maintaining margins, as supply chain disruptions and expedited shipping costs added to the profit squeeze from competitive pricing strategies aimed at landing large customer contracts, J.P. Morgan analysts wrote in a note. The company's adjusted gross margin rate for its second quarter fell to 18.7% from a year earlier and missed estimates of 19.6%, according to data compiled by LSEG. It expects third-quarter profit per share of $2.45, below expectations of $2.55. Dell expects third-quarter revenue to be in the range of $26.5 billion to $27.5 billion, compared with estimates of $26.05 billion. Separately, Dell raised its annual revenue forecast to between $105 billion and $109 billion from its earlier expectations of $101 billion to $105 billion, buoyed by demand for its AI-optimized servers. Its stock has risen 16.3% this year, outperforming rival Hewlett Packard Enterprise (HPE.N), opens new tab and the S&P 500 index (.SPX), opens new tab. Hewlett Packard is set to report its quarterly results on Wednesday after markets close. Dell's shares trade at 13.2 times profit expectations, higher than HPE's 10.8, but far lower than 22.3 for the S&P 500 index (.SPX), opens new tab, despite the company's exposure to high-growth AI infrastructure demand. Reporting by Shashwat Chauhan and Akash Sriram in Bengaluru; Editing by Krishna Chandra Eluri Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Artificial Intelligence Akash Sriram Thomson Reuters Akash reports on technology companies in the United States, electric vehicle companies, and the space industry. His reporting usually appears in the Autos & Transportation and Technology sections. He has a postgraduate degree in Conflict, Development, and Security from the University of Leeds. Akash's interests include music, football (soccer), and Formula 1.

Dell beats on profit and revenue as company says AI server sales will double this year

A Dell Technologies sign is seen in Round Rock, Texas, on June 2, 2023.Brandon Bell | Getty Images Dell Technologies reported second fiscal quarter results on Thursday that beat Wall Street expectations for sales and revenue, which the company attributed to strong growth in its AI server business. Dell said that it now plans to ship $20 billion of artificial intelligence servers in its fiscal 2026, double what it sold last year. Dell shares rose in extended trading. Here's how the systems integrator did versus LSEG consensus estimates: Dell raised its full year outlook for revenue to be $107 billion at its midpoint and diluted earnings per share to $9.55 at the midpoint, topping Wall Street estimates of $104.6 billion and $9.38 per share. However, Dell's guidance for third-quarter earnings per share of $2.45 came in short versus LSEG's mark of $2.55, despite Dell's guide for $27 billion in third-quarter revenue topping estimates of $26.1 billion. Dell said that part of the reason its profit forecast is concentrated in the fourth quarter is due to seasonality, particularly in its storage business. For the second quarter, overall revenue rose 19% on an annual basis. That was driven by the company's Servers and Networking revenue, including AI servers, which came in at $12.9 billion, which was up 69% on an annual basis. Dell is one of Nvidia's key customers. Dell buys chips from the AI leader and builds computers around them, which it sells to end-users such as CoreWeave, a cloud service. Dell said it shipped $10 billion in AI servers in its past two quarters. However, the company's storage revenue declined 3% to $3.86 billion and missed a StreetAccount estimate of $4.1 billion in sales. Revenue in the company's client solutions group, which includes PC sales to enterprises, rose 1% on an annual basis to $12.5 billion. While it used to be Dell's largest business group, in recent quarters it has grown much slowly than the company's data center business. Dell said it spent $1.3 billion on share repurchases and dividends during the quarter.

This old tech name is now a top AI play, according to analysts

Analysts on Wall Street are sticking by Dell Technologies even as the stock pulls back following a weak third-quarter outlook. Dell reported second-quarter results on Thursday that surpassed analyst estimates, but its outlook for the current quarter soured investor sentiment and kept shares under pressure. Third-quarter earnings are estimated to be $2.45 per share, 10 cents shy of the $2.55 per share LSEG estimate. DELL 5D mountain Dell Technologies stock this week. Shares of Dell closed down 8.9% on Friday. But analysts think the pullback is overdone and that Dell's potential growth trajectory can outweigh the near-term concerns thanks to artificial intelligence. Here's a look at what analysts said after Dell's earnings. Bank of America calls Dell an 'AI server juggernaut' Analyst Wamsi Mohan raised his price target to $167 from $165 and reiterated a buy rating on the stock. That's nearly 37% above where the stock is trading. "We remain bullish on shares of DELL where we expect long term EPS growth of 15% over the next five years supported by strong growth in AI servers," the analyst said. "The qtr and FY guide re-affirmed our confidence in Dell continuing to drive upside to AI server consensus rev ests." JPMorgan reiterates overweight rating The firm's $145 price target implies about 19% upside from Friday's close of $122.15. "We rate shares of DELL Overweight as we are more positively inclined toward the AI-driven compute investment cycle, which should benefit branded server companies, even as the drivers for the remaining businesses are more mixed being subject to the macro backdrop," analyst Samik Chatterjee said. "While DELL is unlikely to be perceived as a primary beneficiary of an AI investment cycle, we expect all server companies to benefit in relation to sale of higher-end servers with ASP [application service provider] and (operating) margin upside," the analyst added. Goldman Sachs maintains buy rating Analyst Michael Ng's $150 price target implies about 23% upside. "The company's AI pipeline continues to represent multiples of its backlog and represents a mix of Blackwell and older chip generations. ISG [infrastructure solutions group] margins missed in the quarter (8.8% v. GS/consensus 9.6%/9.4%), in part due to higher mix of lower-margin AI server revenue, competitive pricing, as well as one-time costs incurred in F2Q26 associated with supply chain resiliency and expediting GB200 deployments," Ng said. Morgan Stanley reiterates overweight rating The firm's $144 price target calls for about 18% upside. "[W]e'd still characterize the quarter as illustrating progress, with AI servers the clear standout, and DELL highlighting emerging strength in enterprise AI demand, double digit growth in traditional servers (in F2Q and FY26), and double digit growth in their midrange storage product and entire all-flash portfolio," analyst Erik Woodring said." "Yes, margins face pressure from increasing AI server mix - this should not come as a surprise (and yet the stock is down 5% as a result) - but that is set to reverse in 2H, and if DELL can improve execution in US large enterprise and the overall PC business, then the story should get cleaner from here," the analyst added.

Soft outlook weighs on Dell's stock despite soaring AI server sales - SiliconANGLE

Soft outlook weighs on Dell's stock despite soaring AI server sales Dell Technologies Inc. posted strong second-quarter financial results today, but even though it beat expectations on earnings and revenue, its stock was heading lower on soft guidance for the current quarter. The company reported earnings before certain costs such as stock compensation of $2.32 per share, sneaking past Wall Street's target of $2.30 per share, while revenue jumped 19% to $29.78 billion, ahead of the $29.17 billion estimate. Dell's operating income was up even more, rising 27% from the same period one year earlier to $1.8 billion, while net income rose 32% to $1.164 billion, boosting its overall profitability. The maker of personal computers, data center servers and storage arrays also raised its full-year outlook, saying it's now looking for earnings of $9.55 per share and revenue of $107 billion at the midpoints of its ranges, topping the Street's targets of $9.38 per share and $104.6 billion in revenue. However, Dell's investors were dismayed by a somewhat glum forecast for the current quarter. Dell said it anticipates earnings of $2.45 per share at the midpoint, falling short of the Street's forecast of $2.55 per share. The revenue forecast was better, at least, with Dell guiding for $27 billion, ahead of the analyst's consensus estimate of $26.1 billion. Dell explained that the lower earnings forecast is due to the fact that many of its remaining profits this year will come in the fourth quarter, a result of seasonality, especially in its storage business. But investors could not hide their disappointment, and Dell's stock slid more than 5% in extended trading. Dell's impressive revenue increase in the prior quarter was primarily driven by its Infrastructure Solutions business, which includes sales of servers, storage and networking gear. It generated revenue of $12.9 billion, up 69% from a year earlier. This growth stems from artificial intelligence. Dell is one of Nvidia Corp.'s major customers, buying millions of graphics processing units that are packed into AI servers that it then sells to customers such as Amazon Web Services Inc., Coreweave Inc. and Elon Musk's xAI Corp. Rising demand for AI servers that can handle the enhanced computational needs of AI models has benefited Dell immensely, along with other server makers such as Super Micro Computer Inc. and Hewlett-Packard Enterprise Co. Dell Vice Chairman and Chief Operating Officer Jeff Clarke (pictured) said the company has shipped more than $10 billion worth of AI servers in the first half of fiscal 2025, surpassing the total number it shipped in the whole of the previous year. "This helped deliver another record revenue quarter in our Servers and Networking business, which grew 69%," Clarke said. "Demand for our AI solutions continues to be exceptional, and we're raising our AI server shipment guidance for fiscal 2026 to $20 billion." The growth of AI server sales helped to mask the fact that not all is well in Dell's infrastructure business, as storage revenue declined 3% in the quarter to $3.86 billion, missing the Street's target of $4.1 billion. Dave Vellante, founder and chief analyst of SiliconANGLE Media's sister organization, theCUBE Research said it's almost always the case with Dell that one or two parts of its vast portfolio prosper, while the other segments chug along. "In this case, storage and PCs continued to show softness, but the AI server momentum powered the income statement," he said. "Notably, Dell's gross margins continue to be under pressure but they make it up in AI server volume. And it allows the company to throw off plenty of cash that it mostly returns to shareholders." Revenue from the Client Solutions group, which includes PC sales, inched up just 1% from a year earlier to $12.5 billion. The unit used to be Dell's biggest, but it was surpassed earlier this year by the infrastructure group. PC sales have been held back somewhat by U.S. President Donald Trump's constantly-shifting trade policies, creating uncertainty in the market. However, Dell has reason to be optimistic that PC sales could soon increase, with back-to-school sales now in full swing in the U.S. and Microsoft Corp. set to cut off support for Windows 10 in October. When that happens, Windows 10 PCs will no longer get regular security updates, which should prompt many businesses and consumers to invest in newer devices, potentially giving Dell a boost in the months to come. "Investors are increasingly confident in Dell's ability to deliver what it says it will do, and despite its lower margin profile, its consistent performance, cash generation and conservative cost management make it an attractive way to play the AI trade," Vellante said. During the quarter, Dell hosted its annual customer conference, Dell Technologies World 2025, where it showcased its evolving platform vision for enterprise computing in the era of AI, as well as its latest innovations in server, storage and networking hardware. Dell said it spent more than $1.3 billion on share repurchases and dividends to investors during the quarter. Despite today's after-hours slump, Dell's stock is still up 16% in the year to date, surpassing the broader S&P 500 index, which has gained just over 10% in the same period.

Dell Stock Drops as Soft Q3 Profit Projection Offsets Strong AI Demand

Citi analysts said the increased AI server shipment guidance is good news for Nvidia and Micron Technology. Dell Technologies (DELL) shares sank in premarket trading Friday, a day after it projected soft current-quarter profit. The Round Rock, Texas-based maker of personal computers and servers sees third-quarter adjusted earnings per share (EPS) of $2.45 at the midpoint, below the $2.49 expected by analysts surveyed by Visible Alpha. Dell shares, which entered Friday up 16% this year, dropped 7% in premarket trading. Dell's forecasts for Q3 revenue and full-year profit and revenue came in above Visible Alpha consensus. Its second-quarter adjusted EPS of $2.32 on revenue that surged 19% year-over-year to a record $29.78 billion also topped estimates, which the company attributed to strong AI demand. "We've now shipped $10 billion of AI solutions in the first half of FY26, surpassing all shipments in FY25. This helped deliver another record revenue quarter in our Servers and Networking business, which grew 69%," COO Jeff Clarke said. "Demand for our AI solutions continues to be exceptional, and we're raising our AI server shipment guidance for FY26 to $20 billion" from $15 billion-plus. Citi analysts said in a note Friday that Dell's Q2 PC segment sales were below consensus forecasts "by 3% or roughly $357.0 million," and that it "likely lost share in PCs." It added that the increase in its AI server shipment guidance is good news for Nvidia (NVDA), which makes up 88% of its sales, and Micron Technology (MU), at 17%. "Dell expects the traditional server business to grow in the 2nd half but below their prior expectations from the beginning of the year," the analysts wrote.

Dell shares crash 10% as AI server costs crush margins despite strong demand

Shares of Dell Technologies fell about 10% on Friday, as high manufacturing costs for AI-optimized servers and intensifying competition overshadowed the company's bullish demand forecast for artificial intelligence infrastructure. Shares of Dell Technologies fell about 10% on Friday, as high manufacturing costs for AI-optimized servers and intensifying competition overshadowed the company's bullish demand forecast for artificial intelligence infrastructure. The stock is set to lose roughly $8 billion of its $91 billion market capitalization if losses hold. AI server demand remained a bright spot for the company. Dell raised its annual shipment forecast to $20 billion from $15 billion, citing strong orders from customers including Elon Musk's xAI and cloud provider CoreWeave. Dell prioritized fulfilling AI server orders over maintaining margins, as supply chain disruptions and expedited shipping costs added to the profit squeeze from competitive pricing strategies aimed at landing large customer contracts, J.P. Morgan analysts wrote in a note. The company's adjusted gross margin rate for its second quarter fell to 18.7% from a year earlier and missed estimates of 19.6%, according to data compiled by LSEG. It expects third-quarter profit per share of $2.45, below expectations of $2.55. Dell expects third-quarter revenue to be in the range of $26.5 billion to $27.5 billion, compared with estimates of $26.05 billion. Separately, Dell raised its annual revenue forecast to between $105 billion and $109 billion from its earlier expectations of $101 billion to $105 billion, buoyed by demand for its AI-optimized servers. Its stock has risen 16.3% this year, outperforming rival Hewlett Packard Enterprise and the S&P 500 index. Hewlett Packard is set to report its quarterly results on Wednesday after markets close. Dell's shares trade at 13.2 times profit expectations, higher than Hewlett Packard's 10.8, but far lower than 22.3 for the S&P 500 index, despite the company's exposure to high-growth AI infrastructure demand.

Dell lifts annual forecasts on AI server sales boom - The Economic Times

Rising demand for AI servers, capable of handling computational needs of AI workloads, is benefiting companies such as Dell and Super Micro Computer, but the high cost of producing them and tough competition have pressured margins.Dell raised its annual revenue and profit forecasts on Thursday, buoyed by demand for its artificial intelligence-optimized servers that are powered by Nvidia's advanced chips. Shares fell around 5% in extended trading as Dell's third-quarter profit outlook was below analysts' estimates. Rising demand for AI servers, capable of handling computational needs of AI workloads, is benefiting companies such as Dell and Super Micro Computer, but the high cost of producing them and tough competition have pressured margins. Dell now expects $20 billion in fiscal 2026 revenue from AI server shipments, up from its prior forecast of $15 billion. Its AI servers are used by customers, including Elon Musk's AI startup xAI and CoreWeave. It booked $5.6 billion in AI orders in the second quarter and shipped a record $8.2 billion, leaving an overall backlog of $11.7 billion. The company raised its annual revenue forecast to be between $105 billion and $109 billion from its earlier expectations of $101 billion and $105 billion. Dell expects adjusted earnings per share of $9.55, up from its prior projection of $9.40. Third-quarter revenue forecast of $26.5 billion to $27.5 billion was above analysts' average estimate of $26.05 billion, according to data compiled by LSEG. Adjusted profit forecast for the quarter of $2.45 per share was below estimates of $2.55 per share. Revenue for the second quarter came in at $29.78 billion, beating estimates of $29.17 billion. Excluding items, it reported adjusted profit of $2.32 per share, slightly beating estimates of $2.30 per share. Adjusted gross margin rate fell to 18.7% from a year earlier and missed estimates of 19.6%. Dell's revenue for the infrastructure solutions group, which includes its storage, software and server offerings, rose 44%, while the client solutions group - home to PCs - grew 1%. A strong PC refresh cycle is expected after Microsoft ends support for Windows 10 in October. About half of PCs in use still run Windows 10, with many unable to upgrade and likely needing replacement, said Ben Yeh, principal analyst, PC research at Omdia.

Dell Q2 Earnings: Revenue, EPS Beat Estimates As AI Solutions Shipments Boom - Dell Technologies (NYSE:DELL)

Dell Technologies Inc DELL reported second-quarter financial results after the market close on Thursday. Here's a look at the key highlights from the quarter. Get the latest updates on DELL here. Q2 Highlights: Dell reported second-quarter revenue of $29.78 billion, beating the consensus estimate of $29.17 billion, according to Benzinga Pro. The company reported second-quarter adjusted earnings of $2.32 per share, beating analyst estimates of $2.31 per share. Total revenue was up 19% on a year-over-year basis. Here's a breakdown of revenue by category. Servers and Networking: $12.9 billion, up 69% year-over-year Storage: $3.9 billion, down 3% year-over-year Commercial Client: $10.8 billion, up 2% year-over-year Consumer: $1.7 billion, down 7% year-over-year Cash flow from operations was $2.5 billion in the second quarter. Dell said it returned $1.3 billion to shareholders via share repurchases and dividends in the quarter. The company ended the period with approximately $8.15 billion in cash and cash equivalents. "We've now shipped $10 billion of AI solutions in the first half of FY26, surpassing all shipments in FY25. This helped deliver another record revenue quarter in our Servers and Networking business, which grew 69%," said Jeff Clarke, vice chairman and COO of Dell. "Demand for our AI solutions continues to be exceptional, and we're raising our AI server shipment guidance for FY26." What's Next: Dell expects third-quarter revenue to be between $26.5 billion and $27.5 billion versus estimates of $26.05 billion. The company anticipates third-quarter adjusted earnings of $2.45 per share versus estimates of $2.55 per share. Dell raised its fiscal year 2026 revenue guidance from a range of $101 billion to $105 billion to a new range of $105 billion to $109 billion versus estimates of $104.59 billion. The company also raised its full-year adjusted earnings guidance from $9.40 to $9.55 per share versus estimates of $9.38 per share. Dell executives will further discuss the quarter on an earnings call with investors and analysts at 4:30 p.m. ET. DELL Price Action: Dell shares were down 4.10% in after-hours, trading at $128.50 at the time of publication on Thursday, according to Benzinga Pro. Read Next: Nvidia Q2 Guidance Shows Demand Outstrips Supply For 'New Oil And Gold Of AI Revolution' Photo: mrinalpal/Shutterstock.com DELLDell Technologies Inc$127.89-3.48%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum73.61Growth90.39QualityN/AValue34.93Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Dell's COO Says, 'We Weathered The Storm' On Tariff-Related Shocks -- Input Costs Seen As 'Deflationary' In Q2 - Dell Technologies (NYSE:DELL)

Dell Technologies Inc. DELL is taking a firm stance amid rising trade and tariff-related uncertainties, with COO Jeff Clarke saying that the company does not expect any major impact going forward and does not plan on increasing prices for customers. DELL stock is showing notable weakness. Find out why here. 'We Weathered The Storm' During the company's second-quarter earnings call on Thursday, Clarke said their guidance for the full year already has everything they know about the tariffs priced in. Clarke emphasized that Dell has factored in all known tariff impacts and still sees a favorable pricing environment. In fact, during the second quarter, the company found its input costs to be "deflationary." See Also: How To Earn $500 A Month From Dell Stock Ahead Of Q2 Earnings While tariffs have prompted some tech firms to adjust pricing or issue warnings about cost inflation, Dell signaled its global supply chain is equipped to manage disruptions. "We weathered the storm quite well and ultimately took care of our customers and served them quite well," Clarke said. The company's CFO, Yvonne McGill, echoed this outlook, noting that Dell expects a "10% quarter-over-quarter increase in gross margin dollars," driven in part by profitable AI server growth and improvements in its storage portfolio, and the deflation that it has since experienced in input costs. "We are leveraging the agility and resilience we have built over the past four decades," Clarke said, highlighting Dell's decades-long history in supply chain management as a strategic asset in the face of global uncertainty. Stock Drops Despite Beat On Earnings And Revenue Dell released its second-quarter results on Thursday, reporting $29.78 billion in revenue, up 18.98% year-over-year, while beating consensus estimates of $29.17 billion. It posted a profit of $2.32 per share, which was again ahead of Street estimates at $2.31 per share. Shares of Dell were up 1.22%, closing at $134.05, but are down 6.08% pre-market. The stock scores well in Benzinga's Edge Stock Rankings, scoring high on Momentum and Growth, with a favorable price trend in the medium and long terms. Click here for deeper insights into the stock, its peers and competitors. Read More: Here's How Much You Would Have Made Owning Dell Technologies Stock In The Last 5 Years Photo courtesy: mrinalpal / Shutterstock.com DELLDell Technologies Inc$126.00-6.01%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum72.00Growth90.41QualityN/AValue34.62Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Why Is Dell Stock Sinking Friday? - Dell Technologies (NYSE:DELL)

Dell Technologies DELL reported a sharp rise in second-quarter revenue but tempered investor enthusiasm with profit guidance that fell short of expectations, sending shares lower on Friday. The company posted revenue of $29.78 billion, up 19% year over year, driven by booming demand for its AI servers. Adjusted earnings came in at $2.32 per share, narrowly topping Wall Street's consensus of $2.31. Dell also lifted its full-year fiscal 2026 revenue outlook to as much as $109 billion, compared with the prior consensus of $104.59 billion, and raised its earnings forecast to a range of $9.40 to $9.55 per share from $9.38. Also Read: Dell Poised To Ride AI Server Boom Toward Higher Sales, Long-Term Profit Growth: Analyst For the third quarter, Dell guided earnings of $2.45 per share, below analyst expectations of $2.55, citing margin pressures from supply chain costs and aggressive pricing despite record AI growth. Third-quarter revenue is expected to be between $26.5 billion and $27.5 billion, ahead of the $26.05 billion estimate. Wall Street was quick to parse the results. JP Morgan analyst Samik Chatterjee reiterated an Overweight rating with a price forecast of $145, pointing to stronger-than-expected AI server revenue of $8.2 billion in the quarter versus his $7.2 billion estimate. He noted Dell also booked $5.6 billion in incremental AI orders, which helped lift its fiscal 2026 revenue forecast midpoint by $4 billion to $107 billion. This growth came at the cost of margins, Chatterjee cautioned, citing supply chain inefficiencies, expedite costs, and competitive pricing to win concentrated AI server deals. Even so, Dell raised its fiscal 2026 AI server revenue guidance to $20 billion, up from a prior outlook of at least $15 billion. Chatterjee said that strength more than offset weakness in storage, traditional server demand, and modest shortfalls in its client solutions group (CSG). The $5 billion AI upside, he added, translated into the $4 billion companywide revenue raise. Management expects margin recovery in the second half of the fiscal year, helped by a more favorable storage mix and operational improvements. Dell projects average margins of about 10% in the back half, up from 7.4% in the first, with profits improving roughly 35% despite revenue remaining balanced across both halves. Chatterjee argued Dell is well-positioned to leverage rising AI infrastructure demand, cost discipline, and share buybacks for sustained earnings growth. But he underscored that margin stabilization will be a critical near-term focus, particularly ahead of the company's October Analyst Meeting. Goldman Sachs reiterated a Buy rating, raising its 12-month price forecast to $150 from $140, citing Dell's leadership in AI infrastructure, ongoing PC refresh opportunities, and shareholder returns. Key risks include weaker enterprise IT spending, PC demand softness, competitive pricing pressure, and macroeconomic headwinds. Goldman said Dell's $2.32 EPS topped estimates on stronger CSG, offsetting weak Infrastructure Solutions Group (ISG) margins. While AI server demand drove a revenue guidance raise to $105-$109 billion and lifted fiscal 2026 EPS outlook, limited flow-through to EBIT highlighted margin pressure from traditional servers, storage, and early AI deals. Goldman expects ISG and AI margins to improve in the second half as one-time costs fade, with CSG also benefiting from share gains and PC refresh demand. DELL Price Action: Dell stock is trading lower by 9.43% to $121.41 at last check Friday. Read Next: Whole Foods Corporate Employees Set To Gain Amazon Perks In Major Benefits Overhaul Photo by bluestork via Shutterstock DELLDell Technologies Inc$121.38-9.45%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum72.00Growth90.41QualityN/AValue34.62Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Dell Revenue Jumps 19% in Fiscal Q2 | The Motley Fool

Dell Technologies (DELL 1.70%), a global leader in IT infrastructure and personal computing solutions, reported financial results for Q2 FY2026 on August 28, 2025. The company announced record GAAP revenue of $29.8 billion, up 19%, outpacing analyst estimates (non-GAAP) and the company's own prior midpoint guidance of $29.0 billion. Non-GAAP earnings per share rose to $2.32, a 19% increase over the same period last year and above the prior guidance range. The standout was the company's Infrastructure Solutions Group, where sharp growth in AI-optimized servers set new records. Despite margin pressures, Dell raised its full-year outlook, signaling confidence in continued momentum fueled by AI demand. Dell Technologies is a global provider of technology solutions focused on IT infrastructure, servers, enterprise storage, and personal computers. Its two major operating segments are the Infrastructure Solutions Group (ISG), which covers servers, storage, and networking, and the Client Solutions Group (CSG), which includes commercial and consumer PCs plus related services. The company's recent strategy emphasizes the fast-growing fields of artificial intelligence (AI) infrastructure, hybrid cloud deployments, and new as-a-Service models for buying technology. Key factors critical to Dell's ongoing success are its scale, global reach in over 170 countries, ongoing investment in research and development, flexible payment solutions, and a broad portfolio that provides both recurring and transactional revenue streams. The second quarter showed a shift in Dell's business mix, with the ISG segment delivering record revenue due to demand for AI servers. Revenue in ISG (GAAP) reached $16.8 billion, a 44% rise from the prior year, sharply accelerating from recent quarters. Servers and Networking sales, which make up the bulk of ISG, climbed 69% as customers continued building AI-enabled data centers. Management reported $10 billion in AI solution shipments in the first half of FY2026, already surpassing the full prior year. AI-driven growth did not fully carry over into all areas. Storage business revenue fell 3% to $3.9 billion (GAAP), reversing its recent streak of quarterly gains. The company has pointed to the "attach" opportunity -- selling storage alongside big AI infrastructure deals -- but this connection has not yet delivered higher storage sales. Operating margins in ISG also dropped from 11.0% to 8.8%. Client Solutions Group results were mixed. CSG revenue edged up just 1% to $12.5 billion (GAAP). Commercial PC revenue rose 2%, while consumer PC revenue declined 7%. causing operating margins in CSG to compress from 6.6% to 6.4% compared to Q2 FY2025. The company generated robust adjusted free cash flow of $2.5 billion, up 96% from the prior year, and returned $1.3 billion to shareholders through buybacks and dividends. Gross margin, the portion of revenue left after direct costs, increased in total dollars but declined as a percentage of sales, reflecting a greater share of lower-margin AI hardware and weaker pricing in legacy businesses. Looking ahead, management raised the full-year FY2026 revenue forecast to between $105.0 and $109.0 billion, with a midpoint that is $4.0 billion higher than its previous full-year revenue guidance midpoint. The midpoint for non-GAAP earnings per share is now $9.55, up from the prior guidance of $9.40 non-GAAP. For Q3 FY2026, revenue is expected to be $26.5-$27.5 billion, and non-GAAP EPS is projected at $2.45. Dell also increased its full-year AI server shipment target to $20 billion, up from $15 billion after seeing outsized demand through the first half of the year. Investors should monitor a few important dynamics as Dell's business mix evolves. Rapid growth in AI servers is fueling revenue gains, but also compressing margins for now. The company's ability to realize more storage and recurring services sales from its AI customer base will be important for long-term profitability. The continued slide in consumer PC demand and the pace of further commercial PC upgrades are also critical trends to watch, as is the durability of the current wave of AI infrastructure spending. No change was disclosed during the period.

Dell slides after weak margins eclipse upbeat full-year forecast

Shares of Dell Technologies dropped nearly 6 per cent in premarket trading on Friday, as a dour quarterly profit forecast and weaker-than-expected second-quarter margin rate overshadowed upbeat full-year estimates. Rising demand for servers capable of handling computational needs of AI workloads is benefiting companies such as Dell, Hewlett Packard Enterprise and Super Micro Computer, but the high cost of producing them and tough competition have pressured margins. The company prioritized fulfilling AI server orders over maintaining margins, as supply chain disruptions and expedited shipping costs added to the profit squeeze from competitive pricing strategies aimed at landing large customer contracts, J.P. Morgan analysts wrote in a note. Adjusted gross margin rate for the second quarter fell to 18.7 per cent from a year earlier and missed estimates of 19.6 per cent. The company forecast third-quarter adjusted profit of US$2.45 per share, falling short of analysts' estimates of $2.55 according to data compiled by LSEG. Dell expects third-quarter revenue to be in the range of $26.5 billion to $27.5 billion, compared with estimates of $26.05 billion. Separately, Dell raised its annual revenue forecast to between $105 billion and $109 billion from its earlier expectations of $101 billion to $105 billion, buoyed by demand for its AI-optimized servers It also raised its adjusted earnings per share guidance to $9.55 from its prior projection of $9.40. Shares were last down 5.8 per cent at $126.3, having rallied more than 16 per cent so far this year as of last close. Dell's shares trade at 13.2 times profit expectations, higher than HPE's 10.8, but far lower than 22.3 for the S&P 500 index. Rival Super Micro trades at around 16.3 forward earnings.

Dell punished on the stockmarket despite better-than-expected results

Dell Technologies posted solid quarterly results on Thursday, although its stock fell over 4% after close as investors punished what they saw as cautious forecasts. The group posted Q2 adjusted earnings of $2.32 per share on revenue of $29.78bn, exceeding Wall Street expectations. Dell also raised its annual revenue forecast to $107bn, with EPS of $9.55, above analysts' estimates. Disappointment came from the outlook for Q3: the company forecasts EPS of $2.45, below consensus of $2.55, although its revenue forecast of $27bn exceeds expectations. Dell cited seasonal effects, particularly in storage, to justify this caution. This segment's revenues declined 3% to $3.86bn, below expectations. The core growth area is servers and network solutions, where sales jumped 69% to $12.9bn, driven by demand for artificial intelligence. Dell claims to have sold $10bn worth of AI servers in the last six months and is targeting $20bn for FY 2026. However, revenues from corporate PCs grew by only 1% to $12.5bn. The group also spent $1.3bn on share buybacks and dividends, confirming its redistribution strategy - despite market volatility.

Dell: strong Q2 results; raises annual targets

On Thursday evening, Dell Technologies reported adjusted (non-GAAP) EPS that is up 19% to $2.32 for Q2 (ended early August), as well as adjusted operating profit up 10% to over $2.28bn. The computer manufacturer's revenues rose 19% to a record $29.8bn, thanks to a 44% jump in its infrastructure solutions division, notably driven by its server and network business (+69%). Demand for our AI solutions remains exceptional, and we are raising our forecast for AI server shipments for the full current fiscal year to $20bn, VP and COO Jeff Clarke said. Dell now expects adjusted EPS to increase by 17% to $9.55 (up from $9.40), with revenues between $105bn and $109bn (up from $101bn to $105bn), with growth of 12% for the middle of this range.

Dell lifts annual forecasts on AI server sales boom

(Reuters) -Dell Technologies raised annual revenue and profit forecasts on Thursday, buoyed by demand for its artificial intelligence-optimized servers that are powered by Nvidia's advanced chips. Shares fell more than 4% in extended trading as Dell's third-quarter profit outlook was below analysts' estimates. Rising demand for AI servers, capable of handling computational needs of AI workloads, is benefiting companies such as Dell and Super Micro Computer, but the high cost of producing them and tough competition have pressured margins. Dell now expects $20 billion in fiscal 2026 revenue from AI server shipments, up from its prior forecast of $15 billion. Its AI servers are used by customers, including Elon Musk's AI startup xAI and CoreWeave. The company raised its annual revenue forecast to be between $105 billion and $109 billion from its earlier expectations of $101 billion and $105 billion. Dell expects adjusted earnings per share of $9.55, up from its prior projection of $9.40. Third-quarter revenue forecast of $26.5 billion to $27.5 billion was above analysts' average estimate of $26.05 billion, according to data compiled by LSEG. Adjusted profit forecast for the quarter of $2.45 per share was below estimates of $2.55 per share. Revenue for the second quarter came in at $29.78 billion, beating estimates of $29.17 billion. Excluding items, it reported adjusted profit of $2.32 per share, slightly beating estimates of $2.30 per share. Dell's revenue for the infrastructure solutions group, which includes its storage, software and server offerings, rose 44% to $16.80 billion, while the client solutions group - home to PCs - grew 1% to $12.50 billion. A strong PC refresh cycle is expected after Microsoft ends support for Windows 10 in October, as users seek to maintain security and access to the latest features, boosting demand for PC makers such as Dell and HP. HP beat analysts' estimates for third-quarter revenue on Wednesday, helped by the adoption of AI PCs and the Windows 11 upgrade cycle. (Reporting by Jaspreet Singh in Bengaluru; Editing by Vijay Kishore)

Dell slides after weak margins eclipse upbeat full-year forecast

(Reuters) -Shares of Dell Technologies dropped nearly 6% in premarket trading on Friday, as a dour quarterly profit forecast and weaker-than-expected second-quarter margin rate overshadowed upbeat full-year estimates. Rising demand for servers capable of handling computational needs of AI workloads is benefiting companies such as Dell, Hewlett Packard Enterprise and Super Micro Computer, but the high cost of producing them and tough competition have pressured margins. The company prioritized fulfilling AI server orders over maintaining margins, as supply chain disruptions and expedited shipping costs added to the profit squeeze from competitive pricing strategies aimed at landing large customer contracts, J.P. Morgan analysts wrote in a note. Adjusted gross margin rate for the second quarter fell to 18.7% from a year earlier and missed estimates of 19.6%. The company forecast third-quarter adjusted profit of $2.45 per share, falling short of analysts' estimates of $2.55 according to data compiled by LSEG. Dell expects third-quarter revenue to be in the range of $26.5 billion to $27.5 billion, compared with estimates of $26.05 billion. Separately, Dell raised its annual revenue forecast to between $105 billion and $109 billion from its earlier expectations of $101 billion to $105 billion, buoyed by demand for its AI-optimized servers It also raised its adjusted earnings per share guidance to $9.55 from its prior projection of $9.40. Shares were last down 5.8% at $126.3, having rallied more than 16% so far this year as of last close. Dell's shares trade at 13.2 times profit expectations, higher than HPE's 10.8, but far lower than 22.3 for the S&P 500 index. Rival Super Micro trades at around 16.3 forward earnings. (Reporting by Shashwat Chauhan and Akash Sriram in Bengaluru; Editing by Krishna Chandra Eluri)

Dell is counting on AI to break out of a painful period of stagnation

The artificial intelligence boom is generating a flood of superlatives. For now, this momentum is very real, even if it ultimately seems to benefit only a very limited number of players, including, of course, Nvidia at the top of the food chain, in the role of the major designer. Dell could possibly take on the role of the major coordinator, with its unrivalled scale and integration and distribution capabilities. The Round Rock, Texas-based group proved this once again the day before yesterday with the publication of its half-year results, which were closely scrutinized by analysts. Demand for servers calibrated for artificial intelligence and high-volume computing remains clearly very strong, resulting in growth of 69% over three months and 47% over six months in the corresponding segment. This segment, which now accounts for more than a third of Dell's consolidated revenue, remains its only growth driver, as all other segments are more or less stagnant. This also explains the jump in consolidated operating profit, which increased by a quarter. This comes as a relief to Dell shareholders, who were waiting for the group to give them some reassurance in this regard. This will be necessary for the group to clearly return to growth after five years of stagnant revenue. Even though Dell has returned to the highest margins in its history since the arrival of new AI technologies, this is undoubtedly a positive development. As with other distributors, however, the increase in demand for servers requires very large investments in working capital. These have put cash flows under pressure for the past two years, but here again Dell is providing reassurance this semester. It is difficult to know to what extent this momentum will be sustainable, or whether the group and its distributor peers will be able to claim their share of the pie in a sector that remains controlled by its biggest beneficiary, equipment manufacturer Nvidia. The investor consensus reflects this uncertainty, as it values Dell at multiples that are well within the norm.