Key Stats for Dell Stock
- Today’s Price Change: 2%
- Current Share Price: $116
- 52-Week High: $161
- Dell Stock Price Target: $127
What Happened?
Dell Technologies (DELL) shares surged following the company’s first-quarter earnings report, which featured raised full-year earnings guidance and a stronger-than-expected forward outlook.
Adjusted earnings per share of $1.55 came in 8% below analysts’ estimates of $1.69, while revenue of $23.38 billion was about 1% higher than analysts’ estimates.
Still, the company had an overall strong performance despite the earnings miss due to the company’s artificial intelligence server business, which delivered unprecedented demand and drove optimistic guidance.
Dell reported a staggering $12.1 billion in AI server orders during the first quarter alone, surpassing the total number of AI shipments for fiscal 2025 (which ended in January). This brought the company’s AI server backlog to $14.4 billion, with $7 billion expected to ship in the current quarter.
Management raised its full-year adjusted earnings per share guidance to $9.40, a 10-cent increase from the prior outlook, while maintaining its revenue expectations at around $103 billion.
For the current quarter, Dell projected significantly higher-than-expected earnings of $2.25 per share, with revenue between $28.5 billion and $29.5 billion, substantially above analyst estimates.
The Infrastructure Solutions Group, which encompasses servers and storage, reported strong growth, with revenue increasing 12% to $10.3 billion.
Server and networking revenue reached a first-quarter record of $6.3 billion, up 16%, driven by robust demand for AI servers and continued growth in traditional servers for the sixth consecutive quarter.
Dell’s pipeline for AI systems continues to grow with enterprise customers representing an increasing portion of demand.
See Dell’s full analyst estimates, earnings results, and earnings transcript (It’s free) >>>
What the Market Is Telling Us
The positive reaction to Dell stock reflects investor enthusiasm for Dell’s positioning in the rapidly expanding AI infrastructure market.
Its role as a primary vendor building systems around NVIDIA’s AI graphics processing units has created significant revenue opportunities, with AI servers commanding higher margins than traditional systems.
Dell’s massive AI order backlog provides strong revenue visibility. CEO Jeff Clarke noted that the five-quarter pipeline continues to grow sequentially and remains “multiples” of the current backlog.
Its ability to deliver complex AI systems quickly, including deployment and installation services, has become a key differentiator in winning large enterprise and cloud provider deals.
The raised earnings guidance despite mixed quarterly results demonstrates the substantial profit potential from AI server shipments.
Management emphasized that AI systems drive “significant gross margin dollar growth” and “significant operating income dollar growth,” even as the business dilutes overall margin rates due to its scale.
Dell’s aggressive capital return program also attracted investor attention. In just one quarter, $2.4 billion was returned to shareholders through buybacks and dividends, exceeding the $2.58 billion spent on repurchases for all of fiscal 2025.
This reflects management’s confidence in the business and its commitment to creating shareholder value amid the AI infrastructure boom.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
