Mehdi Hosseini, Susquehanna International Group senior equity research analyst, says he is remaining neutral on Dell after the company raised its annual projections for the key artificial intelligence server market. He speaks on "Bloomberg The Close." ...

Q3 FY26 Performance Highlights - Dell Technologies achieved a record Q3 revenue of $2701 billion, up 11% year-over-year, driven by AI server shipments[10, 11] - The company's diluted EPS reached $228, a 39% year-over-year increase, with a record Q3 non-GAAP diluted EPS of $259, up 17% year-over-year[10, 11] - Dell Technologies generated $12 billion in cash flow from operations in Q3, bringing the year-to-date total to $65 billion[10] - The company returned $16 billion of capital to shareholders in Q3, resulting in $53 billion returned year-to-date[10] Infrastructure Solutions Group (ISG) Performance - ISG revenue reached $1411 billion, a 24% year-over-year increase, with servers and networking revenue up 37% to $1013 billion[11] - Storage revenue for ISG was $398 billion, a decrease of 1% year-over-year[11] - ISG operating income improved sequentially to 124%, driven by AI server and storage performance[10] AI Server Business - Dell Technologies booked $30 billion in AI-optimized server orders year-to-date and expects to ship $25 billion in FY26[12] - AI shipments reached $56 billion in Q3, leading to $156 billion of shipments year-to-date, with an AI backlog of $184 billion exiting Q3[10] - The company expects to ship roughly $94 billion of AI servers in Q4, bringing FY26 shipments to roughly $25 billion, a 150% year-over-year increase[10] Client Solutions Group (CSG) Performance - CSG revenue was $1248 billion, a 3% year-over-year increase, with commercial revenue up 5% to $1062 billion[11] - Consumer revenue for CSG was $186 billion, a decrease of 7% year-over-year[11] FY26 Guidance - Dell Technologies projects FY26 revenue of $1117 billion ± $05 billion, up approximately 17% year-over-year, and non-GAAP diluted EPS of $992 ± $010, up approximately 22% year-over-year[15]

Core Viewpoint - The restructuring plan is deemed essential by Chief Executive Enrique Lores for maintaining the company's competitive edge [1] Group 1 - The company is undergoing a restructuring plan to enhance its competitiveness in the market [1]

Core Insights - HP Inc plans to cut between 4,000 and 6,000 jobs globally by fiscal 2028 as part of a strategy to streamline operations and integrate artificial intelligence to enhance product development [1] Group 1 - The job cuts are aimed at improving operational efficiency and adapting to technological advancements [1] - The company is focusing on leveraging artificial intelligence to accelerate its product development processes [1]

Group 1 - Dell Technologies expects full-year revenue to be between $111.2 billion and $112.2 billion, an increase from the previous estimate of $105 billion to $109 billion [1] - The company anticipates AI server shipments to reach $25.8 billion, surpassing analyst expectations of $20.82 billion and its own prior forecast of $20 billion [1]

Core Insights - Dell reported fiscal third-quarter earnings that fell short of Wall Street revenue expectations but forecasted a stronger fourth quarter driven by increased AI sales [1][2] - The company expects fourth-quarter sales of approximately $31.5 billion, exceeding analyst estimates of $27.59 billion, and anticipates earnings per share of $3.50 compared to the expected $3.21 [1][2] Financial Performance - Dell's net income for the quarter was $1.54 billion, or $2.28 per diluted share, compared to $1.17 billion, or $1.64 per diluted share in the same period last year [2] - Overall revenue increased by 11% year-over-year, with the data center business reporting $14.11 billion in sales, aligning with analyst estimates [3][5] AI and Infrastructure - The company raised its expectations for AI server shipments to $25 billion from $20 billion and increased its full-year revenue guidance to $111.7 billion from $107 billion [2] - Dell's AI systems primarily serve large businesses, governments, and neoclouds, with significant sales driven by $5.6 billion in AI server shipments [3][5] Segment Performance - The Infrastructure Solutions Group reported $10.1 billion in server and networking sales, a 37% increase year-over-year, while the Client Solutions Group, which includes laptops and PCs, reported $12.48 billion in sales, a 3% increase but below the expected $12.65 billion [5][6] - The laptop and PC segment experienced a 7% decline year-over-year [6] Shareholder Returns - The company allocated $1.6 billion during the quarter for share repurchases and dividends [6]

Dell forecast fourth-quarter revenue and profit above Wall Street estimates on Tuesday, as increasing investments in data centers to support artificial intelligence applications boost demand for its s... ...

Core Insights - The stock market experienced a sell-off driven by concerns over an AI bubble, affecting various equities, including those not directly linked to the AI sector [3][7] - The concept of "oversold" stocks suggests a potential for price reversion, particularly for companies with strong fundamentals and competitive advantages [4] - Technical indicators like the Relative Strength Index (RSI) are useful for identifying potential stock turnarounds, with readings below 30 indicating oversold conditions [5] Company Analysis - Oracle Corporation is positioning itself as a significant player in the AI industry, leveraging its cloud infrastructure and enterprise software for AI applications [6] - Despite being primarily known for cloud software and databases, Oracle's recent price correction is viewed as excessive, suggesting potential for recovery [6] - Analysts' 12-month price targets for Oracle and Super Micro Computer indicate substantial upside potential, as both stocks are currently in oversold territory [5][7]

Core Viewpoint - Dell's upcoming earnings report is highly anticipated, particularly regarding its margin performance amid rising memory chip costs, which have led to a significant decline in its stock price over the past month [1][2][4]. Financial Performance Expectations - Analysts expect Dell to report earnings per share (EPS) of $2.48 on revenues of $27.2 billion, with a focus on the company's ability to manage margins effectively [5]. - Last quarter, Dell's operating margin was reported at 7%, and the company aims to increase this to between 10% and 14% by the end of the fiscal year, which is just one quarter away [4][5]. Market Sentiment and Analyst Actions - There is a notable concern among analysts regarding Dell's margin resilience, leading many to lower their estimates and price targets ahead of the earnings report [2][6][7]. - Bank of America has adjusted its price target for Dell, anticipating that the company will likely implement measures to reduce operating expenses to counteract rising memory costs [6]. Industry Context - The broader market sentiment is influenced by concerns over potential bubbles in the AI sector, particularly as Dell is closely tied to Nvidia, which has faced scrutiny regarding its valuations [8][9]. - The current trading environment reflects a cautious approach, with analysts wary of potential earnings misses that could lead to further stock price declines [9]. Trading Strategies - A neutral to bullish trading strategy is being suggested for Dell, utilizing a four-legged spread to capitalize on higher implied volatility levels, allowing for profitability even if the stock price remains stable or declines slightly [11][12][16].

Time now for Options Corner. Joining us to take a deeper look at the chart is Rick Dukat, lead market technician. All right, Rick, this Dell's been a slight underperformer compared to the S&P 500.Which trends this year. What trends are you watching. >> Yes, uh, a notable underperformer as well versus its own tech sector, this recent unwind that we've seen.Seems to have hit Dell a little bit harder, down about 11.7% during the past year. XLK ETF up 19.7%. So a big disparity there.Uh but when we look at our c ...