We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Dell expects fiscal second-quarter revenues in the range of $23.5-$24.5 billion, with a midpoint of $24 billion, indicating 5% growth. Earnings are expected to be $1.65 per share (+/- 10 cents).
The Zacks Consensus Estimate for revenues is pegged at $24.29 billion, suggesting 5.91% growth from the figure reported in the year-ago quarter.
The consensus mark for quarterly earnings is pegged at $1.74 per share, unchanged year over year. The consensus estimate for earnings has increased 1.2% in the past 30 days.
Dell’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, with an earnings surprise of 27.66% on average.
Let’s see how things have shaped up for DELL shares prior to this announcement:
Dell is well-poised to report solid results in the fiscal second quarter, driven by its portfolio strength and an expanding partner base that includes the likes of NVIDIA (NVDA - Free Report) , CrowdStrike, Nokia, AMD, Ericsson, Intel and Commvault, among others.
Dell shares have further room for expansion, given the robust demand for AI-optimized servers. In the fiscal first quarter, AI-optimized server orders increased to $2.6 billion, with shipments up more than 100% sequentially to $1.7 billion.
However, weak PC shipment due to sluggishness in the consumer segment is expected to have hurt DELL’s top-line growth in the to-be-reported quarter.
Per IDC, DELL is the only vendor that witnessed a shipment decline in the second quarter of 2024. DELL’s shipments are expected to have declined 2.4% year over year. It, along with HP (HPQ - Free Report) , also lost market share, per the IDC report.
DELL Shares Outperform Sector
Year to date, Dell shares have returned 46%, outperforming the broader Zacks Computer & Technology sector’s return of 22.2% and the Zacks Computer-Micro industry’s gain of 18.2%.
Except for NVIDIA, Dell Technologies shares have outperformed peers, including HPQ, Apple (AAPL - Free Report) , and Lenovo.
Year-to-Date Performance Chart
Image Source: Zacks Investment Research
DELL stock is cheap, as the Value Score of A suggests.
Dell stock is trading at a significant discount with a forward 12-month Price/Earnings (P/E) of 12.59X compared with the Zacks Computer- Micro Computers industry’s 30.08X.
P/E Ratio (F12M)
Image Source: Zacks Investment Research
Dell Stock Rides on Strong Portfolio, Partner Base
DELL shares are riding on strong demand for AI servers driven by ongoing digital transformation and heightened interest in generative AI (GenAI) applications.
Dell AI Factory launch has been a key catalyst. It combines Dell’s solutions and services optimized for AI workloads and supports an open ecosystem of partners comprising NVIDIA, Meta Platforms, Microsoft and Hugging Face.
NVIDIA has played a pivotal role in developing the Dell AI Factory. The collaboration integrates Dell’s portfolio with NVIDIA’s AI Enterprise software platform and Tensor Core GPUs, enhancing compute power and simplifying AI application development and deployment for faster time to value.
Dell and Ericsson are collaborating to develop tailored network cloud infrastructure plans and advise communications service providers on their cloud transformation journeys. The commercial introduction of Ericsson Cloud RAN software on Dell PowerEdge servers with continuous testing and lifecycle management is noteworthy.
Strong demand for AI servers drives Dell stock’s prospects. It has shipped more than $3 billion of AI servers over the past three quarters. Its AI server backlog was $3.8 billion, up sequentially by roughly $900 million at the end of the first quarter of fiscal 2025.
DELL expects the momentum to continue in fiscal 2025, driven by a strong portfolio of AI-optimized solutions and an expanding partner base.
What Should Investors Do With DELL Stock?
Dell’s robust portfolio and expanding partner base are key drivers that make the stock attractive for long-term investors. Hence, investors who already own the stock may expect the company's growth prospects to be rewarding over the long term.
However, the Growth Style Score of D suggests that DELL’s growth prospects are lackluster in the near term. A contraction in fiscal 2025 gross margin of roughly 150 basis points due to high input costs, stiff competition and an unfavorable mix of AI-optimized servers is hard to ignore for growth-oriented investors.
DELL shares are also trading below the 50-day moving average, indicating a bearish trend.
Image: Bigstock
Should You Buy, Hold or Sell DELL Stock Ahead of Q2 Earnings?
Dell Technologies (DELL - Free Report) is set to report its second-quarter fiscal 2025 results on Aug 29.
Dell expects fiscal second-quarter revenues in the range of $23.5-$24.5 billion, with a midpoint of $24 billion, indicating 5% growth. Earnings are expected to be $1.65 per share (+/- 10 cents).
The Zacks Consensus Estimate for revenues is pegged at $24.29 billion, suggesting 5.91% growth from the figure reported in the year-ago quarter.
The consensus mark for quarterly earnings is pegged at $1.74 per share, unchanged year over year. The consensus estimate for earnings has increased 1.2% in the past 30 days.
Dell’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, with an earnings surprise of 27.66% on average.
Let’s see how things have shaped up for DELL shares prior to this announcement:
Dell Technologies Inc. Price and EPS Surprise
Dell Technologies Inc. price-eps-surprise | Dell Technologies Inc. Quote
Factors to Note for DELL
Dell is well-poised to report solid results in the fiscal second quarter, driven by its portfolio strength and an expanding partner base that includes the likes of NVIDIA (NVDA - Free Report) , CrowdStrike, Nokia, AMD, Ericsson, Intel and Commvault, among others.
Dell shares have further room for expansion, given the robust demand for AI-optimized servers. In the fiscal first quarter, AI-optimized server orders increased to $2.6 billion, with shipments up more than 100% sequentially to $1.7 billion.
However, weak PC shipment due to sluggishness in the consumer segment is expected to have hurt DELL’s top-line growth in the to-be-reported quarter.
Per IDC, DELL is the only vendor that witnessed a shipment decline in the second quarter of 2024. DELL’s shipments are expected to have declined 2.4% year over year. It, along with HP (HPQ - Free Report) , also lost market share, per the IDC report.
DELL Shares Outperform Sector
Year to date, Dell shares have returned 46%, outperforming the broader Zacks Computer & Technology sector’s return of 22.2% and the Zacks Computer-Micro industry’s gain of 18.2%.
Except for NVIDIA, Dell Technologies shares have outperformed peers, including HPQ, Apple (AAPL - Free Report) , and Lenovo.
Year-to-Date Performance Chart
Image Source: Zacks Investment Research
DELL stock is cheap, as the Value Score of A suggests.
Dell stock is trading at a significant discount with a forward 12-month Price/Earnings (P/E) of 12.59X compared with the Zacks Computer- Micro Computers industry’s 30.08X.
P/E Ratio (F12M)
Image Source: Zacks Investment Research
Dell Stock Rides on Strong Portfolio, Partner Base
DELL shares are riding on strong demand for AI servers driven by ongoing digital transformation and heightened interest in generative AI (GenAI) applications.
Dell AI Factory launch has been a key catalyst. It combines Dell’s solutions and services optimized for AI workloads and supports an open ecosystem of partners comprising NVIDIA, Meta Platforms, Microsoft and Hugging Face.
NVIDIA has played a pivotal role in developing the Dell AI Factory. The collaboration integrates Dell’s portfolio with NVIDIA’s AI Enterprise software platform and Tensor Core GPUs, enhancing compute power and simplifying AI application development and deployment for faster time to value.
Dell and Ericsson are collaborating to develop tailored network cloud infrastructure plans and advise communications service providers on their cloud transformation journeys. The commercial introduction of Ericsson Cloud RAN software on Dell PowerEdge servers with continuous testing and lifecycle management is noteworthy.
Strong demand for AI servers drives Dell stock’s prospects. It has shipped more than $3 billion of AI servers over the past three quarters. Its AI server backlog was $3.8 billion, up sequentially by roughly $900 million at the end of the first quarter of fiscal 2025.
DELL expects the momentum to continue in fiscal 2025, driven by a strong portfolio of AI-optimized solutions and an expanding partner base.
What Should Investors Do With DELL Stock?
Dell’s robust portfolio and expanding partner base are key drivers that make the stock attractive for long-term investors. Hence, investors who already own the stock may expect the company's growth prospects to be rewarding over the long term.
However, the Growth Style Score of D suggests that DELL’s growth prospects are lackluster in the near term. A contraction in fiscal 2025 gross margin of roughly 150 basis points due to high input costs, stiff competition and an unfavorable mix of AI-optimized servers is hard to ignore for growth-oriented investors.
DELL shares are also trading below the 50-day moving average, indicating a bearish trend.
DELL Shares Trade Below 50-Day SMA
Image Source: Zacks Investment Research
DELL currently has a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point in the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.