Michael Dell, chairman and chief executive officer of Dell Inc., speaks during the Dell Technologies World conference in Las Vegas, Nevada, US, on Monday, May 20, 2024.Dell reported fourth-quarter sales that fell short of analysts' estimates but earnings topped Wall Street expectations. Here's how the hardware company did versus LSEG consensus estimates:Revenue: $23.9 billion, versus $24.55 billion estimatedEPS: $2.68, adjusted, versus $2.53 estimated.Dell shares are down less than 5% so far in 2025, but th ...

Financial Performance - Full-year revenue reached $95.6 billion, an 8% increase year over year[3] - Full-year operating income was $6.2 billion, up 15% year over year, with non-GAAP operating income at $8.5 billion, up 8%[3] - Record diluted earnings per share (EPS) of $6.38, a 39% increase year over year, and non-GAAP diluted EPS of $8.14, up 10%[3] - Fourth-quarter revenue was $23.9 billion, a 7% increase year over year, with operating income of $2.2 billion, up 40% year over year[3] - Fourth-quarter Servers and Networking revenue was $6.6 billion, up 37%, driven by AI and traditional server demand[7] - Non-GAAP operating income for the three months ended January 31, 2025, was $2,674 million, a 22% increase from $2,195 million year-over-year[41] - Non-GAAP net income for the three months ended January 31, 2025, was $1,911 million, reflecting a 15% increase from $1,660 million in the previous year[41] - Non-GAAP earnings per share for the three months ended January 31, 2025, was $2.68, an 18% increase from $2.27 in the same period last year[41] - Non-GAAP net income for the fiscal year 2025 was $5,865 million, an 8% increase from $5,422 million in fiscal year 2024[45] - Earnings per share attributable to Dell Technologies Inc. for the three months ended January 31, 2025, was $2.15, a 30% increase from $1.66 in the same period last year[47] Revenue Breakdown - Infrastructure Solutions Group revenue grew by 22% in Q4, with AI server backlog at approximately $9 billion[3] - Product revenue increased by 12% to $18,049 million, while services revenue decreased by 5% to $5,882 million for the same three-month period[25] - Infrastructure Solutions Group (ISG) net revenue increased by 22% to $11,352 million compared to $9,332 million in the prior year[31] - Client Solutions Group (CSG) total net revenue grew by 1% to $11,881 million, with commercial revenue up 5% but consumer revenue down 12%[31] Cash Flow and Assets - Cash flows from operating activities showed a change of $585 million for the three months ended January 31, 2025, compared to $1,533 million in the prior year[29] - The company reported a total cash, cash equivalents, and restricted cash balance of $3,819 million at the end of the period, down from $7,507 million at the beginning[29] - Total current assets increased to $36,229 million as of January 31, 2025, compared to $35,984 million as of February 2, 2024[27] - Cash and cash equivalents decreased significantly to $3,633 million from $7,366 million[27] - Adjusted free cash flow for the fiscal year 2025 was $3,097 million, a 45% decrease from $5,607 million in fiscal year 2024[53] Liabilities and Equity - Total liabilities decreased to $81,133 million from $84,258 million year-over-year[27] - The company’s long-term debt increased slightly to $19,363 million from $19,012 million[27] - The reportable segment operating income for the same period was $2,051 million, compared to $2,018 million in the previous year, showing a slight increase of 2%[67] - The company reported an accumulated deficit of $(4,630) million, which was revised to $(4,453) million after adjustments, a positive change of $177 million[76] - Total stockholders' equity deficit improved from $(2,309) million to $(2,132) million, reflecting a positive adjustment of $177 million[76] Future Guidance - FY26 guidance includes full-year revenue growth of 8%, diluted EPS growth of 23%, and non-GAAP diluted EPS growth of 14%[3] - Full-year FY26 revenue is expected between $101.0 billion and $105.0 billion, with GAAP diluted EPS expected to be $7.85, up 23% year over year[8] - The company projects diluted earnings per share of $1.29 for the three months ending May 2, 2025, and $7.85 for the fiscal year ending January 30, 2026[58] - Non-GAAP earnings per share attributable to Dell Technologies Inc. is expected to be $1.65 for the three months ending May 2, 2025, and $9.30 for the fiscal year ending January 30, 2026[58] Dividend and Share Repurchase - The company announced an 18% increase in annual cash dividend to $2.10 per share and a $10 billion increase in share repurchase authorization[5] Adjustments and Misstatements - The company identified a misstatement impacting the Client Solutions Group segment, overstating cost of goods sold by approximately $200 million in fiscal 2024 and $148 million in fiscal 2025[11]

Core Viewpoint - Dell Technologies Inc is set to report its fourth-quarter earnings, with Wall Street expecting an EPS of $2.53 and revenues of $24.56 billion, indicating a strong market interest in the upcoming results [1] Stock Performance - Dell stock has increased by 26.31% over the past year but has seen a slight decline of 0.76% year-to-date [1] - The stock is currently trading at $112.85, with analysts projecting a price target of $134.05, suggesting a potential upside of 24% [6] Technical Analysis - The stock is exhibiting a strongly bullish trend, trading above its five-day, 20-day, and 50-day exponential moving averages, indicating sustained buying pressure [2] - The Moving Average Convergence Divergence (MACD) indicator at 0.94 supports a bullish outlook, while the 20-day and 50-day simple moving averages (SMA) at $111.04 and $112.98 indicate continued strength in the short- to mid-term [3] - However, the eight-day SMA at $116.52 presents a bearish signal, suggesting near-term resistance, and the 200-day SMA at $122.99 indicates a longer-term downtrend, which could hinder sustained gains [4] Investor Sentiment - The Relative Strength Index (RSI) of 49.90 places Dell stock in neutral territory, indicating it is neither overbought nor oversold, with potential buying opportunities if the stock dips toward the 50-day SMA [5]

Group 1 - The account is managed by Noah's Arc Capital Management, focusing on 20th century stocks undergoing transformation in the 21st century [1] - The research aims to identify innovations in business models that could lead to significant stock changes [1] Group 2 - The main author, Noah Cox, is the managing partner of Noah's Arc Capital Management, and his views may not reflect the firm's overall stance [3] - The article is intended solely for informational purposes and does not constitute investment advice [3]

Core Insights - Dell Technologies (DELL) is anticipated to report fiscal 2025 fourth-quarter results, with analysts expecting revenue growth primarily from servers and networking solutions [1][4] - The consensus among analysts is largely positive, with six out of seven maintaining "buy" or equivalent ratings, and a price target suggesting approximately 30% upside from recent trading levels [1][4] Financial Expectations - Analysts project adjusted earnings per share (EPS) of $2.51 and net sales of $24.56 billion, representing increases from $2.20 EPS and $22.32 billion in sales a year prior [2] - The Infrastructure Solutions Group is expected to achieve record revenue of $11.74 billion, reflecting over 25% year-over-year growth [2] Market Sentiment and Challenges - Bank of America has reduced its price target for Dell to $150, citing potential short-term challenges in AI server revenue due to supply-chain issues with Nvidia's Blackwell chips [3] - Morgan Stanley has also lowered its price target to $128, describing the company's short-term outlook as "choppy," despite robust demand for AI servers [3] - Dell is reportedly close to a deal to sell over $5 billion worth of servers powered by Nvidia GB200 chips to Elon Musk's xAI [3] Stock Performance - Dell's shares experienced a slight decline of about 3% recently but have increased over 23% in the past year [4]

Core Insights - A small Chinese AI start-up has developed a generative AI chatbot to compete with OpenAI's ChatGPT, claiming to have trained its model with only $6 million and a few thousand Nvidia GPUs, contrasting sharply with U.S. tech companies that spend billions on similar projects [1] - The announcement from the start-up has raised concerns about the future spending of tech giants on GPUs and servers, leading to a sell-off of Nvidia's stock [4] Group 1: Nvidia's Market Position - Despite initial concerns regarding Nvidia's future, major companies like Amazon and Alphabet have reaffirmed their substantial capital expenditure budgets, which will largely be allocated to data center infrastructure including Nvidia GPUs [2] - Nvidia's fiscal 2025 is already showing strong performance, with expectations for continued success [3] - The forward price-to-earnings ratio for Nvidia has decreased to 31, down from a recent peak of 50, indicating a potential buying opportunity for investors [4][5] Group 2: Dell's Business Performance - Dell's Infrastructure Services Group (ISG) reported a 34% increase in revenue year-over-year, reaching $11.4 billion, with operating income rising 41% to $1.5 billion, indicating strong demand for data center products [7] - A potential $5 billion deal with xAI could further boost Dell's ISG revenue [2][6] - Dell's Client Services Group (CSG) experienced a slight decline in sales by 1% to $12.1 billion, but still managed to achieve an operating profit of $700 million [7] Group 3: Investment Opportunities - Dell offers a rising dividend currently yielding 1.5%, with a recent 20% increase and a commitment to a 10% annual increase through fiscal 2028 [8] - Following the DeepSeek news, Dell's stock has also dropped, trading over 20% below the average analyst target of $150 per share, suggesting a potential buying opportunity for investors [10]

Core Viewpoint - Dell Technologies is set to report its fourth-quarter fiscal 2025 results, with expectations of revenue growth and earnings performance amid challenges in the PC market and strong demand for AI servers [1][2][12]. Financial Performance Expectations - Dell anticipates fourth-quarter revenues between $24 billion and $25 billion, with a midpoint of $24.5 billion, indicating a 10% growth year-over-year [2]. - Earnings per share are expected to be around $2.50, with a slight variation of +/- 10 cents, while the Zacks Consensus Estimate for revenues is $24.66 billion, suggesting a 10.48% increase from the previous year [2][3]. - The consensus estimate for quarterly earnings is $2.53 per share, reflecting a year-over-year growth of 15% [3]. Recent Trends and Market Position - Dell's earnings have consistently exceeded the Zacks Consensus Estimate in the past four quarters, with an average earnings surprise of 10.44% [4]. - The company has faced sluggish PC shipments in the consumer segment, which have negatively impacted top-line growth due to ongoing consumer demand challenges and competitive pressures [5]. - According to Gartner, Dell experienced a 0.1% year-over-year decline in worldwide PC shipments in Q4 2024, with a market share decrease of 20 basis points to 15.5% [6]. Segment Performance - Dell expects a 13% year-over-year revenue growth at the midpoint for its combined Infrastructure Solutions Group (ISG) and Client Solutions Group (CSG) [7]. - ISG revenues are projected to increase in the mid-twenties percentage range, while CSG revenues are expected to grow in low single digits year-over-year [7]. - The Zacks Consensus Estimate for ISG revenues is $11.713 billion, indicating a 25.5% year-over-year growth, while CSG is pegged at $12.074 billion, suggesting a 3.1% growth [8]. AI Demand and Future Outlook - Strong demand for AI servers is seen as a key growth driver, with Dell shipping $2.9 billion of AI servers in Q3 2025 and having a backlog of $4.5 billion [12]. - The Dell AI Factory, which integrates solutions optimized for AI workloads, is expected to support long-term growth targets [13]. - Dell anticipates revenue growth between 3% and 4% and earnings growth of more than 8% during the 2024-2028 period, with plans to return over 80% of adjusted free cash flow to shareholders [14]. Stock Performance and Valuation - Year-to-date, Dell's shares have declined by 0.7%, underperforming the broader Zacks Computer & Technology sector, which has returned 2.1% [9]. - The stock is considered overvalued, with a Value Score of C [11]. - Technical indicators show that Dell shares are trading below the 200-day moving average, suggesting a bearish trend [15][16].

Group 1 - Dell Technologies (DELL) closed at $120.96, with a +0.52% change, outperforming the S&P 500's daily gain of 0.24% [1] - Over the past month, DELL shares appreciated by 7.88%, surpassing the Computer and Technology sector's gain of 1.76% and the S&P 500's gain of 2.37% [1] Group 2 - Dell Technologies is set to announce its earnings on February 27, 2025, with an expected EPS of $2.52, reflecting a 14.55% increase from the same quarter last year [2] - Revenue is forecasted to be $24.66 billion, indicating a 10.48% rise compared to the year-ago quarter [2] Group 3 - Recent adjustments to analyst estimates for Dell Technologies indicate near-term business trends, with positive revisions suggesting analyst optimism about the company's profitability [3] - The Zacks Rank system, which evaluates estimate changes, has a strong track record, with 1 stocks averaging a +25% annual return since 1988 [4][5] Group 4 - Dell Technologies currently has a Forward P/E ratio of 13.25, which is below the industry average of 14, suggesting it is trading at a discount [6] - The company has a PEG ratio of 0.97, compared to the industry average of 1.67, indicating favorable valuation metrics [7] Group 5 - The Computer - Micro Computers industry, which includes Dell Technologies, has a Zacks Industry Rank of 168, placing it in the bottom 34% of all industries [7][8] - The Zacks Industry Rank measures the strength of industry groups, with the top 50% rated industries outperforming the bottom half by a factor of 2 to 1 [8]

Group 1 - The article promotes a subscription service, Beyond the Wall Investing, which offers access to high-quality equity research reports, potentially saving investors thousands of dollars annually [1] - Dell Technologies is recognized as a well-known firm that produces a wide range of products, including laptops and powerful servers, indicating its significant presence in the technology sector [1] - The investing group provides various features such as a fundamentals-based portfolio, weekly analysis from institutional investors, short-term trade alerts based on technical signals, and community engagement [1] Group 2 - The article does not provide specific financial metrics or performance data related to Dell Technologies or the broader industry [2]

Group 1 - Dell shares increased significantly after reports of a potential $5 billion deal with Elon Musk's startup xAI for artificial intelligence servers [1] - The servers are expected to include Nvidia's GB200 graphics processing units, indicating a strong demand for AI-related hardware [1] - Dell reported $3.6 billion in quarterly AI server order demand, contributing to a total revenue of $24.37 billion for the quarter ended November 1, which is a 10% year-over-year increase [2] Group 2 - xAI recently announced a $6 billion funding round aimed at purchasing GPUs, highlighting the startup's focus on enhancing its AI capabilities [3] - The Grok assistant from xAI is currently available for users on the social network X, owned by Musk, indicating the integration of AI into social media platforms [3]