Dell Earnings on Deck – What Are Markets Expecting?

Dell Technologies' stock price (NYSE: DELL) is running hot into earnings, with gains of 19.48% over the past month of trading bringing the YTD gains up to an impressive 92.75%. With earnings on deck after market close today, we take a look at what markets are expecting from Dell.

The report, scheduled to be released after the market closes, is expected to showcase both sales and profit gains compared to the previous year.

According to broad consensus, Dell's third-quarter revenue is anticipated to land at $24.73 billion, reflecting a growth of more than 11% increase year-over-year. Earnings per share (EPS) is expected at $2.07, which would reflect a solid jump from the $1.88 delivered in the same quarter YoY, and the $1.89 of last quarter.

The most recent quarter came in with solid beats on both top and bottom lines, with the $1.89 EPS and $25.03 billion in revenue beating the street's $1.71, and $24.12 billion comfortably and helping accelerate the recent bullish trend from August's low.

This momentum has been bolstered by Dell’s server business, leveraging advanced AI technologies that answer the growing demand for smarter computing solutions. Nvidia's earnings coming last week gave an insight into demand, with the read seen as positive for enterprise server OEMs including Dell.

Morgan Stanley analysts have shined a light on the potential growth opportunities Dell may encounter with its focus on artificial intelligence servers, pinpointing the year 2025 as a period for more pronounced growth. These servers, integrating Nvidia AI chips, have earned accolades during Nvidia’s earnings calls, emphasising Dell's presence in the burgeoning AI market.

Evercore ISI have also added DELL to their ‘tactical outperform' list in recent days, also highlighting demand in ISG being seen through Nvidia's report. The price target of $150 is being fast caught by the bullish momentum in the stock, with markets front running the report to a degree, with gains of more than 8% in Dell's stock price over the last five trading sessions.

Despite the optimistic tones, analysts have highlighted potential headwinds that could sway the upcoming results. Concerns include “sub-seasonal PC market trends” as well as “flattish” quarter-over-quarter growth in AI server markets. These influences are pivotal to monitor as they could play a decisive role in shaping Dell's performance as the quarter’s data becomes public.

With a general bullish sentiment, tempered by cautionary notes on market trends, the forthcoming report will undoubtedly provide a clearer picture of Dell's market positioning and its trajectory heading into the new year.