Dell Technologies Inc. (DELL) reported that sales increased 6.3% to $22.2 billion, beating analysts’ average estimate of $21.6 billion.

Dell’s profit, excluding certain items, was $1.27 per share, compared to the average estimate of $1.23.

Dell’s powerful servers designed to handle AI tasks were a major contributor. Revenue from these servers more than doubled from the previous quarter to $1.7 billion.

Backlog for AI servers increased by more than 30% from the previous quarter to $3.8 billion.

Dell expects the momentum from AI demand to continue throughout the year.

The company raised its revenue outlook for the fiscal year ending in February 2025 to a range of $93.5 billion to $97.5 billion, up 8% at the midpoint and beating analysts’ average earnings estimate of 7%.

Adjusted earnings are expected to be around $7.65 per share, slightly below the average estimate of $7.70.

Despite the positive results, excitement over AI demand has raised expectations and caused Dell's stock price to fall in long-term trading.

My comment: NVIDIA benefited greatly from the partnership, but DELL does not yet have a very active role in AI, and I do not think it will benefit from this rally for a long time.

Therefore, the reason for DELL's decline after the earnings report; If you are not a major player in AI, the earnings report does not fascinate Wall Street and they quickly punish it.

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