Dell Technologies Inc. DELL reported impressive results for second-quarter fiscal of 2025, wherein both the top and the bottom line surpassed the Zacks Consensus Estimate. This was primarily driven by an 80% increase in server sales powered by artificial intelligence (AI) chips. The company also upwardly revised its full-year fiscal 2025 revenue guidance.
Dell Technologies currently carries a Zacks Rank #3 (Hold). This means that the stock price is expected to perform in line with the market in the near future. Investors should note that the magnitude and direction of estimate revisions could change following the company's just-released earnings report. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DELL’s Second-Quarter Earnings at a Glance
Dell Technologies reported quarterly adjusted earnings per share (EPS) of $1.89, beating the Zacks Consensus Estimate of $1.74. This compares to earnings of $1.74 per share a year ago. The company posted revenues of $25.03 billion, surpassing the Zacks Consensus Estimate by 3.03%. This compares to year-ago revenues of $22.93 billion.
DELL’s Servers and Networking revenue came in at $7.76 billion, up 80% year over year and 82.3% sequentially. Within this, its AI-optimized servers sales rose about 23% sequentially to $3.2 billion in the second quarter.
The backlog for these AI servers was $3.8 billion at the end of the last reported quarter. DELL sells AI-optimized servers using GPUs of NVIDIA Corp. NVDA. It also uses the GPUs of Advanced Micro Devices Inc. AMD.
DELL has expanded its AI offerings in partnership with NVIDIA with "new server, edge, workstation, solutions and services advancements." On May 20, DELL announced the new Dell PowerEdge XE9680L server, which "offers direct liquid cooling and eight NVIDIA Blackwell Tensor Core GPUs for fast processing in a compact form factor."
DELL is benefiting from strong demand for AI servers driven by the ongoing digital transformation and heightened interest in generative AI applications. DELL’s PowerEdge XE9680 AI-optimized server is in demand. Strong enterprise demand for AI-optimized servers is aiding DELL.
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Earnings Estimates for DELL on the Rise
Dell Technologies upwardly revised for full fiscal 2025 revenues to the range of $95.5 - $98.5 billion from the previous range of $93.5 - $97.5 billion. Total revenue for fiscal 2024 was $88.4 billion. Management also forecast annual adjusted EPS of $7.80 (+/- $0.25). DELL projected revenues for the ensuing third-quarter in the range of $24 - $25 billion.
Dell Technologies has an expected revenue and earnings growth rate of 9.6% and 9.8%, respectively, for the current year (ending January 2025). The Zacks Consensus Estimate for the current-quarter and current-year earnings has improved over the last 30 days.
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Robust Price Upside for DELL Shares
Year to date, shares of Dell Technologies have jumped 49.1%. At the same time, the stock price has slumped nearly 34% since the company reported its fiscal first-quarter 2025 results. At present, the average stock price target of brokerage firms represents an increase of 38.3% from the last closing price of $110.74. The brokerage target stock price is currently in the range of $97-$186.
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