Dell (DELL) rose about 4% after reporting earnings late the prior day, adding to a 250% gain year to date going into the print. Expectations were high, and the results cleared the bar. The stock held its gains from the after-hours move, though a little below the peak, up around 4.5%.
The numbers
Quarterly revenue hit a record $47 billion, up 58% from a year earlier. Earnings per share came in at $6.34, up 273% from the year-ago period. Adjusted earnings rose 203% to $2.74 per share. Dell (DELL) booked a record $60.9 billion AI server backlog and exited the quarter with a record $95 billion total backlog. The company also reported growth in its traditional servers, networking, and storage businesses.
The CEO raised the full-year fiscal 27 revenue outlook by $25 billion to $192 billion, up nearly 70% year over year, citing accelerating AI momentum and expanding opportunity across the portfolio. Orders have grown as enterprise customers adopt AI and run agentic AI queries locally on AI servers.
The bull case rests on strong AI server demand offsetting the bear case around memory pricing. HPE (HPE) moved higher in sympathy and reports later the same day; a key question is whether its numbers look similar or whether the move is already priced in.
Analyst reaction
Sell-side notes were similar - a clear, significant beat with surging demand, record numbers, and results better than any analyst had modeled. Server revenue, orders, and backlog came in well above what firms had modeled.
- BofA (BFA): target raised to $600 from $505, buy rating; demand keeps outpacing supply, creating a solid pricing environment, and the firm liked the fiscal-year revenue guidance uptick.
- Barclays: to $603 from $550, overweight.
- Morgan Stanley (MS): to $499 from $433, equal-weight, slightly less bullish.
- Piper Sandler: to $558 from $497, overweight.
- JP Morgan (JPM): to $635 from $565.
- Melius Research: to $735 from $650, buy - the highest target found.
- Citi (C): to $600 from $515, calling it a clear beat.
At the time of the move, the stock traded near $443.
Trade view
Great report and great guidance, but the broader market is on edge. I like Dell (DELL) and the whole space long term, yet for now the move higher looks worth fading, and the stock had already come about $30 off the day's highs. Big support sits around 435, with resistance near the earlier high.
The setup: sell an iron condor using September 18th expiration - sell the 435/425 put spread on the downside and the 480/490 call spread on the upside. That gives a wide profit zone, with a credit around $6.50 collected and risk of only about $3.50. On September 18th, the break-evens would be 428.50 on the downside and 486.50 on the upside.
Broader market
Chip stocks drew buyers and technology stabilized quickly in the session. The moves reflect daily rotation tied to what the Fed may or may not do. The morning's ADP number came in lighter than expected, which some read as a possible precursor to Friday's jobs report - another weak or missed number could help the market. With rotation happening almost daily, betting on a single sector right now is tough.
