Dell Technologies: Anticipated First-Quarter Fiscal Results and Insights
Dell Technologies (DELL) is set to unveil its first-quarter fiscal results for 2026 on May 29. Analysts project that revenues will land between $22.5 billion and $23.5 billion, with a midpoint indicating a potential 3% increase compared to the previous year. Forecasts for non-GAAP earnings are approximately $1.65 per share, suggesting a robust growth of around 25%.
The consensus estimate for revenues stands at $23.10 billion, showing expected growth of 3.86% from the same period last year. For quarterly earnings, analysts have pegged the consensus at $1.71 per share, marking a year-over-year increase of close to 34.65%.
As Dell Technologies prepares to report its fiscal first-quarter results, various factors suggest strong performance. The demand for AI-optimized servers is on the rise, fueled by ongoing digital transformation and increased interest in generative AI applications. Dell expects a 6% year-over-year revenue growth at the midpoint for its combined Infrastructure Solutions Group (ISG) and Client Solutions Group (CSG) for the upcoming quarter. Specifically, ISG revenues are anticipated to grow in the low teens, while CSG revenues are predicted to remain flat compared to last year.
The Zacks Consensus Estimate for ISG revenues is currently set at $10.379 billion, representing an 11.2% year-over-year hike. Meanwhile, CSG is projected to generate $12.237 billion, reflecting a yearly growth of 2.25%. The expanding market for AI, alongside Dell's leadership in providing optimized servers like the PowerEdge 9680, is expected to bolster these figures.
Year-to-date, Dell Technologies has experienced a slight decline of 2.7%, contrasting with a 3.6% return from the broader Zacks Computer & Technology sector. This performance can be attributed to various factors, including an expanding portfolio and a diverse partnership network. However, external economic pressures, such as tariffs imposed by the Trump administration on major trading partners—most notably China, Mexico, and Canada—have strained stock performance.
Dell Technologies is viewed as undervalued in the market, as indicated by its Value Score of B. The company's shares are trading at a notably low forward price-to-sales (P/S) ratio of 0.75X, in stark contrast to the sector average of 6.12X. This suggests that investors may find opportunities for growth at an appealing cost.
Dell is benefitting from a broadening network of partnerships that includes notable companies like NVIDIA, Microsoft, and Advanced Micro Devices (AMD). Collaborations are driving innovations, especially in AI technology, aimed at enhancing enterprise AI integration.
In May 2025, Dell announced advancements through a partnership with NVIDIA to fast-track enterprise AI adoption. This includes the launch of next-generation PowerEdge servers, improved AI data platforms, and managed services designed to streamline AI deployment. The positive implications of this collaboration are likely to be reflected in upcoming quarterly results.
Additionally, Dell has worked with Meta Platforms to integrate their Llama 2 models into Dell’s AI-optimized portfolio, making AI-adoption easier for clients. A partnership with AMD, initiated in February 2025, focuses on developing AI solutions that enhance telecom network management using Dell’s PowerEdge XE7745 servers.
Despite Dell’s strong offerings and an expanding partner ecosystem, the overall recovery in the PC market is lagging behind expectations. Customers are postponing purchases as they reassess investments in AI-enabled devices and prepare for the upcoming end of Windows 10.
The increasingly competitive landscape in the AI data center market is also creating challenges, especially in terms of gross margin expansion. Additionally, investor sentiment has been negatively impacted by rising trade tensions, further complicated by potential cost-increasing tariffs.
Currently, Dell Technologies maintains a Zacks Rank of #3 (Hold), suggesting investors may want to consider a cautious approach before making entry decisions regarding the stock.
For those seeking updated investment opportunities, it may be insightful to explore a curated list of top-performing stocks in the technology sector.
Final Note: The views and opinions expressed in this analysis are solely those of the author and do not reflect the stance of any affiliated organizations.
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