Dell Technologies (DELL) reported well-received results for its fiscal first quarter, with revenue reaching $23.38 billion, marking a 5.1% year-over-year increase and surpassing analyst expectations of $23.14 billion. The company's Infrastructure Solutions Group emerged as a standout performer, with servers and networking revenue surging 16% to $6.3 billion, primarily driven by unprecedented demand for artificial intelligence (AI)-optimized servers.
Despite adjusted net income improving to $1.09 billion ($1.55 per share) from $959 million ($1.32 per share) year-over-year, these figures fell short of analyst expectations, indicating some pressure on profitability metrics.
DELL is up about 1% in after-hours trading, extending a recent breakout above its 200-day moving average. Based on its 14-day Relative Strength Index (RSI), the stock has been lingering in overbought territory for quite a while, which means Dell stock is vulnerable to a reversal.
Dell’s Q1 By the Numbers
The AI server segment showed remarkable momentum, generating $12.1 billion in orders during the quarter and accumulating a substantial backlog of $14.4 billion, highlighting Dell's strong position in the rapidly expanding AI infrastructure market.Â
While the Client Solutions Group achieved 5% revenue growth to $12.5 billion, there was a notable divergence between commercial revenue, which grew 9%, and consumer revenue, which declined 19%, reflecting shifting market dynamics.
DELL also generated record first-quarter cash flow from operations of $2.8 billion, and returned $2.4 billion to shareholders through dividends and share repurchases.Â
What’s in the Forecast for Dell?
Looking ahead, Dell provided strong guidance for Q2 FY26, as the revenue forecast of $28.5-29.5 billion significantly exceeded analysts’ estimates. The company maintained its full-year revenue outlook of $101-105 billion while raising its adjusted EPS forecast to $9.40, surpassing the Wall Street consensus of $8.95.Â
Industry analysts remain optimistic about Dell's AI segment, projecting potential AI server revenue of nearly $20 billion this year, underscoring the company's strategic positioning in this high-growth market.
This article was generated with the support of AI and reviewed by an editor. On the date of publication, the editor did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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