Dell Technologies(US:DELL) Zhi Tong Cai Jing·2025-11-26 08:04Core Insights - Dell's Q3 FY26 earnings call highlighted a significant acceleration in AI growth, with record orders of $12.3 billion and a backlog of $18.4 billion [1] - The company expects Q4 revenue to be between $31 billion and $32 billion, with a non-GAAP EPS of $3.50, reflecting a 31% year-over-year increase [1] - For FY26, Dell anticipates total revenue of $111.2 billion to $112.2 billion, representing a 17% growth, and an EPS of $9.92, a 22% increase [1] AI Business Outlook - Dell has strong confidence in its AI business, projecting revenue growth driven by backlog orders and project reserves [2] - The company plans to leverage market expansion, gross margin improvement, cost control, and stock buybacks to enhance EPS growth [2] Financial Performance - Q3 orders reached $12.3 billion, with year-to-date orders totaling $30 billion, both record highs [1] - Q3 shipments amounted to $5.6 billion, with year-to-date shipments at $15.6 billion [1] - The backlog of orders stands at $18.4 billion, indicating robust demand [1] Profitability and Cost Management - AI server profitability improved quarter-over-quarter, with margins recovering to the mid-single digits [6] - The company is focused on managing rising costs through pricing adjustments and operational efficiency [3][7] - ISG's operating margin increased by 350 basis points to 12.4% in Q3, driven by strong storage performance and strict pricing discipline [8] Market Dynamics - The PC market is expected to remain vibrant due to the ongoing transition to Windows 11 and the demand for AI PCs [10] - Dell's traditional server demand has shown double-digit growth, although revenue growth has not fully aligned with demand [10] - The company is optimistic about the potential for significant upgrades in the server market, as approximately 70% of existing devices are outdated [10] Strategic Focus - Dell is shifting towards its proprietary IP storage solutions, which are expected to enhance revenue and improve margins [12] - The company is actively targeting three core areas: open automation in private cloud, AI data platforms, and network resilience solutions [12] - Dell's procurement strategy remains stable, with a focus on ensuring supply chain continuity amid rising component costs [13]