Core Viewpoint - The personal computer (PC) market is projected to grow by 4.1% year-over-year in 2025, with global shipments expected to reach 274 million units, driven by demand for AI-powered PCs and the transition to Microsoft Windows 11, although U.S. tariffs and macroeconomic challenges may negatively impact shipments in the latter half of 2025 [1] Dell Technologies - Dell Technologies is experiencing strong demand for commercial PCs, with Client Solutions Group (CSG) revenues reaching $12.5 billion in Q1 fiscal 2026, a 5% increase year-over-year, and commercial client revenues rising 9% to $11.04 billion [2][5] - The company has a broad portfolio of AI-capable PCs, including new Dell Pro Max notebooks and desktops equipped with advanced processors and GPUs, and is collaborating with partners like Meta Platforms and Microsoft [3] - Despite commercial growth, Dell's consumer business is struggling, with revenues declining 19% due to competition from Lenovo and HP, resulting in a market share drop to 9.8% [4] - Dell's second-quarter shipment grew 3% year-over-year to 9.8 million units, but it still lagged behind HP and Lenovo [4] - The Zacks Consensus Estimate for Dell's fiscal 2026 earnings is $9.47 per share, indicating a 16.3% increase over fiscal 2025 [11] Apple - Apple's Mac business is benefiting from strong demand for its M4 chip series, with new products like the MacBook Air and Mac Studio enhancing its portfolio [6] - Apple's Mac shipments increased by 21.4% year-over-year, raising its market share to 9.1% [9] - The Zacks Consensus Estimate for Apple's fourth-quarter fiscal 2025 Mac revenues is $8.05 billion, reflecting a 14.8% growth compared to the previous year [10] - The consensus for Apple's fiscal 2025 earnings has risen by 3.1% to $7.33 per share, suggesting an 8.6% growth over fiscal 2024 [12] Stock Performance and Valuation - Dell Technologies shares have returned 11% year-to-date, outperforming Apple's decline of 10.1% [13] - Dell shares are considered cheaper, with a Price/Sales ratio of 0.8X compared to Apple's 7.84X, indicating a more favorable valuation for Dell [16] - Dell Technologies holds a Zacks Rank 2 (Buy), while Apple has a Zacks Rank 3 (Hold), suggesting that Dell is currently a better investment option [20]

Financial Data and Key Metrics Changes - Revenue reached $23.4 billion, up 5%, driven by growth across all core markets [8][22] - Earnings per share increased by 17% to $1.55, growing three times faster than revenue [8][22] - Net income rose by 13% to $1.1 billion, primarily driven by stronger operating income [24][22] - Gross margin was $5.1 billion or 21.6% of revenue, down 80 basis points due to a competitive pricing environment [22][23] Business Line Data and Key Metrics Changes - ISG revenue was $10.3 billion, up 12%, with servers and networking revenue at a record $6.3 billion, up 16% [24][25] - CSG revenue rose by 5% to $12.5 billion, with commercial revenue up 9% to $11 billion, while consumer revenue declined 19% to $1.5 billion [27][22] - PowerStore demand rose double digits, growing for five consecutive quarters [13] Market Data and Key Metrics Changes - Strong demand for AI optimized servers, with $12.1 billion in orders booked in Q1, surpassing all shipments in FY 2025 [9][24] - Enterprise AI customers grew sequentially across key industry verticals including WebTech, financial services, manufacturing, media, and education [9][10] - Commercial demand was strongest in North America, with EMEA and APJ regions also showing double-digit growth [14] Company Strategy and Development Direction - The company is focused on expanding its leadership in AI, investing in innovation, and deepening customer partnerships [11][18] - The strategy includes modernizing the business and driving increased EPS growth through AI and infrastructure solutions [34][19] - The company aims to capture a substantial refresh opportunity with its sixteenth and seventeenth generation servers [12][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for AI servers and the ability to execute on large, complex customer deployments [39][40] - The company anticipates a continued PC refresh cycle and expects Q2 revenue to be between $28.5 billion and $29.5 billion, up 16% at the midpoint [30][32] - Management remains cautious about traditional server and storage performance due to the dynamic macro environment [32][34] Other Important Information - The company generated record cash flow from operations of $2.8 billion in Q1 [28] - A total of $2.4 billion was returned to shareholders through stock repurchases and dividends [29] - The company expects full-year revenue to be between $101 billion and $105 billion, with ISG expected to grow in the high teens [32][33] Q&A Session Summary Question: AI server revenues and fiscal 2026 targets - Management noted that the backlog for AI servers is healthy, with expectations to exceed $15 billion in revenue for fiscal 2026 [37][43] Question: Second half guidance and demand moderation - Management indicated that they expect to ship approximately $7 billion of AI servers in the first half, with optimism for converting more pipeline in the second half [46][49] Question: Storage and services attach opportunity alongside AI servers - Management highlighted improvements in storage and networking attach rates, emphasizing the importance of deployment and installation services [56][58] Question: Impact of tariffs on financials - Management confirmed that their guidance includes considerations for tariffs and that they have navigated the cost environment successfully [68][70] Question: AI server profit outlook and customer types - Management reiterated that AI server profitability is expected to contribute positively to overall margins, with a growing number of enterprise customers [75][80] Question: Customer behavior and demand pull forward - Management acknowledged some customers pulling forward demand but remains optimistic about growth despite a slowdown in traditional server business [84][88] Question: Competitive dynamics and pricing strategies - Management stated that ASPs remained stable, with no price increases, and noted competitive behavior in large deals [93][99] Question: Storage attach rate and object scale platform - Management expressed optimism about storage opportunities and the potential to improve attach rates through new product offerings [104][108] Question: Demand characteristics and backlog composition - Management characterized the backlog as primarily consisting of Blackwell technology, with a focus on engineering and innovation to meet customer needs [112][114]