Key Takeaways
- Dell Technologies posts Q2 fiscal results after Tuesday’s closing bell, with Wall Street forecasting EPS between $4.92-$4.95 on roughly $45 billion in revenue
- Server and networking revenue is expected to reach $25.2 billion, representing a 95% increase from the prior year
- Shares have skyrocketed 268% year-to-date and currently trade at 21.5x forward earnings multiples
- The company secured $24.4 billion in AI-related orders during Q1 and increased its fiscal 2027 AI server revenue projection to $60 billion
- The primary question among investors isn’t whether Dell will surpass expectations, but if management will elevate its AI revenue targets once more
Dell Technologies is scheduled to unveil its second-quarter financial performance following Tuesday’s market close, with anticipation running high. Wall Street consensus from FactSet projects adjusted earnings at $4.92 per share alongside revenue totaling $44.9 billion, a substantial increase from $2.32 per share and $29.8 billion reported during the corresponding quarter last year.
The Zacks research consensus stands marginally higher, projecting EPS at $4.95 with revenue reaching $45.34 billion, marking 52% growth compared to the previous year. These Wall Street projections slightly exceed Dell’s internal Q2 guidance range of $44-$45 billion in revenue and adjusted earnings per share of $4.80, with a variance of $0.10.
Shares of Dell have climbed 268% since January and presently command a forward earnings multiple of 21.5x. This valuation represents a significant premium over the company’s five-year historical average of 10.9x forward earnings. The stock currently sits approximately 10% beneath its 52-week peak of $514.
The critical metric investors will scrutinize is AI server revenue performance. Analyst projections place server and networking storage revenue at $25.2 billion for the quarter, reflecting a 95% surge from the $12.9 billion recorded twelve months earlier.
During the first quarter, Dell delivered $16.1 billion in AI-optimized server revenue, representing a remarkable 757% year-over-year increase. The company also accumulated $24.4 billion in AI-related orders during that period and has since elevated its fiscal 2027 AI server revenue forecast to $60 billion.
Wall Street Perspectives
Amit Daryanani from Evercore ISI maintains an Outperform rating on Dell with a $550 price objective. In his August 28 analysis, he characterized expectations as “high but achievable,” emphasizing that the central question revolves around whether Dell will boost its AI server projections again rather than simply meeting current estimates.
Brandon Nispel of KeyBanc takes a more measured stance. His August 23 commentary highlighted that following multiple quarters of explosive expansion, “deceleration is inevitable,” while noting Dell’s current valuation premium relative to historical norms. He assigns a Sector Weight rating without establishing a specific price target.
Earnings projections for fiscal 2027 have climbed nearly 11% during the past three months, advancing from $17.40 to $19.29. Fiscal 2028 forecasts have similarly increased almost 10%, moving from $21.42 to $23.51. Dell is currently projected to achieve 87% EPS expansion in fiscal 2027.
AI Infrastructure Expansion Strategy
Dell’s PowerEdge server portfolio represents the cornerstone of its artificial intelligence growth trajectory. The company has strengthened its collaboration with Nvidia via the Dell AI Factory initiative, introducing new systems leveraging Nvidia’s Vera Rubin architecture.
Dell has simultaneously intensified its relationship with AMD, delivering platforms equipped with AMD Instinct accelerators.
Competitive pressures remain substantial. Hewlett Packard Enterprise, Super Micro Computer, and Lenovo are aggressively pursuing AI server opportunities.
Super Micro delivered stronger-than-anticipated fiscal fourth-quarter results on August 11 and provided an optimistic full-year forecast. Cisco similarly reported robust performance driven by AI hardware demand.
Zacks presently assigns Dell a Rank 1 (Strong Buy) classification ahead of Tuesday’s earnings announcement.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
