Dell Stock Braces for Big Moves After Earnings

Dell Technologies is set to report its fiscal second-quarter results, with the options market indicating a substantial stock reaction of approximately 11%. The company's guidance for the quarter included $44 billion to $45 billion in revenue and a significant $15.5 billion in AI server revenue. Dell's Infrastructure Solutions Group, encompassing servers and storage, was expected to grow by about 75%.

Performance in the previous quarter was exceptionally strong, with revenue of $43.8 billion, an 88% year-over-year increase, and adjusted earnings per share of $4.86. Building on this momentum, Dell raised its full-year revenue outlook to $167 billion at the midpoint and increased its AI server revenue target for fiscal year 2027 to $60 billion, highlighting the sustained demand in artificial intelligence.

Key metrics to watch include new orders and backlog, which reached a record $51.3 billion in AI orders. Investors will also focus on profit margins, as AI servers typically yield thinner margins than storage. Potential supply chain issues and inflationary pressures on parts could impact Dell's ability to meet demand and maintain profitability. Analysts largely maintain a positive outlook, with most rating the stock a buy.

The market's reaction will hinge on Dell's ability to once again raise its full-year guidance and provide clarity on second-half supply chain conditions. Comparisons to Nvidia's recent modest stock reaction to its earnings report will also be relevant.