Dell shares hold post-earnings gains as analysts applaud “exceptional beat+raise”
Dell’s across-the-board beat of key earnings metrics delivered after the close of trading Thursday is receiving rave reviews from Wall Street analysts.
Here’s a smattering of the chatter, much of which focused on Dell’s surprising ability to pass a parabolic price surge in memory chip prices through to customers:
Bernstein Research: “Management highlighted record AI server orders of $34.1B and $9.5B of AI server shipments, exiting the quarter with a record $43B AI backlog. Importantly, Dell characterized enterprise as the fastest growing portion of AI portfolio and pipeline, with enterprise AI up both in absolute dollars and as a mix for both shipments and orders, supported by a growing customer base of 4,000+ AI customers and expanding use cases beyond early pilots.”
Mizuho: “Key points: 1) Fiscal 2027 AI server revenues guided up 100% y/y to ~$50B (WELL ABOVE consensus ~$36B), 2) Memory cost impact limited with AI Server operating margin reiterated at mid-single-digit percentage better than feared, with margins stabilizing post-Jan price increases.”
Citi: “An exceptional beat+raise. 4Q revenues upsided expectations (+39% year-over-year) exceeding the top end of their guide while EPS was also higher (+45% year-over-year) on higher margins. Guide also significantly upsided expectations fiscal 2027 estimated revenue up ~25%+, AI revenues to double (core server/storage MSD, CSG 1%) and EPS up 26%, with gross margins ex-AI showing improvement.”
Barclays: “Infrastructure Solutions Group (ISG) growth was significant — up 73% year-over-year reaching a record $19.6B revenue in the Q, marking eight consecutive quarters of double digit growth. Management expects the strong growth momentum to continue and guided to a doubling of ISG revenues in Q1. AI servers growth accelerated tremendously with $34B of AI server orders in Q4 (up from $12B the prior Q), leading to a total of $64B orders for the fiscal year, which represents a 6x increase year-over-year.”
Morgan Stanley: “Our fiscal 2027 EPS estimate of $10.97 remains well below management’s $12.90. Why? Because we struggle to conceptually understand how — excluding AI servers — DELL can significantly increase prices multiple times through the year, drive over 200 basis points of year-over-year gross margin expansion, and see limited demand elasticity. That’s what the guidance implies.”
Bernstein Research: “Management highlighted record AI server orders of $34.1B and $9.5B of AI server shipments, exiting the quarter with a record $43B AI backlog. Importantly, Dell characterized enterprise as the fastest growing portion of AI portfolio and pipeline, with enterprise AI up both in absolute dollars and as a mix for both shipments and orders, supported by a growing customer base of 4,000+ AI customers and expanding use cases beyond early pilots.”
Mizuho: “Key points: 1) Fiscal 2027 AI server revenues guided up 100% y/y to ~$50B (WELL ABOVE consensus ~$36B), 2) Memory cost impact limited with AI Server operating margin reiterated at mid-single-digit percentage better than feared, with margins stabilizing post-Jan price increases.”
Citi: “An exceptional beat+raise. 4Q revenues upsided expectations (+39% year-over-year) exceeding the top end of their guide while EPS was also higher (+45% year-over-year) on higher margins. Guide also significantly upsided expectations fiscal 2027 estimated revenue up ~25%+, AI revenues to double (core server/storage MSD, CSG 1%) and EPS up 26%, with gross margins ex-AI showing improvement.”
Barclays: “Infrastructure Solutions Group (ISG) growth was significant — up 73% year-over-year reaching a record $19.6B revenue in the Q, marking eight consecutive quarters of double digit growth. Management expects the strong growth momentum to continue and guided to a doubling of ISG revenues in Q1. AI servers growth accelerated tremendously with $34B of AI server orders in Q4 (up from $12B the prior Q), leading to a total of $64B orders for the fiscal year, which represents a 6x increase year-over-year.”
Morgan Stanley: “Our fiscal 2027 EPS estimate of $10.97 remains well below management’s $12.90. Why? Because we struggle to conceptually understand how — excluding AI servers — DELL can significantly increase prices multiple times through the year, drive over 200 basis points of year-over-year gross margin expansion, and see limited demand elasticity. That’s what the guidance implies.”
