Stock Jumps on Booming AI Market, but Delays Loom

  • Dell Technologies reported better-than-expected results for its July quarter
  • Revenue increased by 9% to $25 billion
  • Adjusted earnings were $1.89 per share, above the consensus estimate of $1.70
  • AI servers generated $3.2 billion in revenue, up 23% quarter-on-quarter
  • Dell stock jumped 6.6% to $118.20 in premarket trading
  • AI server build plans revised downward due to shipment delays or pushouts
  • Full-year target now at 37,000-38,000 units, with F2H25 PowerEdge 9680 AI server builds closer to 21,000 units
  • Revenue outlook for the current quarter is $24 billion to $25 billion

Dell Technologies has reported better-than-expected results for its July quarter, driven by strong demand for servers powered by artificial intelligence. The company’s revenue increased by 9% to $25 billion, surpassing the Wall Street consensus of $24.1 billion. Adjusted earnings were $1.89 per share, exceeding the analysts’ estimate of $1.70. Dell’s stock rose 6.6% to $118.20 in premarket trading. Dell Technologies COO Jeff Clarke stated that AI momentum accelerated in Q2, with an increase in enterprise customers buying AI solutions each quarter. The company revealed that AI servers generated $3.2 billion in revenue, up 23% quarter-on-quarter. However, Morgan Stanley analyst Erik Woodring mentioned a downward revision to Dell’s AI server build plans due to shipment delays or pushouts. The full-year target now stands at 37,000-38,000 units, with F2H25 PowerEdge 9680 AI server builds closer to 21,000 units, down from about 30,000 previously. This revision is attributed to timing-related dynamics rather than project cuts or cancellations. Woodring rates Dell as Overweight with a price target of $136. The stock has gained 45% so far this year through Thursday’s close.

Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about Dell Technologies’ financial performance and AI server sales, citing specific revenue numbers and analyst opinions. It also includes a forecast for the current quarter.
Noise Level: 3
Noise Justification: The article provides relevant information about Dell Technologies’ financial performance and AI server demand, but it lacks in-depth analysis or exploration of long-term trends or consequences of decisions. It also does not offer actionable insights or new knowledge beyond the company’s financial results.
Public Companies: Dell Technologies (DELL)
Key People: Jeff Clarke (Chief Operating Officer), Erik Woodring (Analyst at Morgan Stanley)

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Financial Relevance: Yes
Financial Markets Impacted: Dell Technologies’ stock price and financial performance
Financial Rating Justification: The article discusses Dell Technologies’ better-than-expected financial results, impacting the company’s stock price and affecting Wall Street consensus estimates. It also mentions an analyst’s rating and target for the company, as well as the company’s revenue outlook for the current quarter.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: No extreme event mentioned in the text
Move Size: The market move size mentioned in the article is a 6.6% increase in Dell Technologies’ share price to $118.20 in premarket trading on Friday.
Sector: Technology
Direction: Up
Magnitude: Large
Affected Instruments: Stocks

Image source: Jjpwiki / Own work

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