Shares of Dell Technologies (NYSE:DELL) climbed nearly 2% in early trading Friday following the company’s decision to raise its full-year earnings guidance, despite mixed financial results for the first quarter impacted by tariff-related demand challenges.
In Q1, Dell reported adjusted earnings per share (EPS) of $1.55 on revenues of $23.38 billion, falling short of the estimated EPS of $1.69 but slightly exceeding revenue forecasts of $23.13 billion.
The client solutions division, covering PCs and laptops, posted a 5% year-over-year revenue increase to $12.5 billion, driven by strong sales to commercial customers that helped offset a 19% decline in consumer demand.
Orders for AI servers came in at an impressive $12.1 billion, surpassing expectations, while the backlog at quarter-end reached $14.4 billion. Additionally, the infrastructure solutions segment saw a 12% rise in revenue compared to the previous year.
Barclays analysts noted, “While Dell’s first-quarter results were mixed, the standout was AI server orders totaling $12.1 billion, exceeding last fiscal year’s total AI revenues.” They added that although Dell is performing well in the AI server market, the conversion of these orders into revenue remains uneven for now, partly due to ongoing transitions with Blackwell and delays in rack-scale deployments.
For the second quarter, the company anticipates non-GAAP diluted EPS of $2.25 at the midpoint – a 15% increase over prior periods and above the $2.11 consensus. Revenue guidance ranges from $28.5 billion to $29.5 billion, with a midpoint of $29.0 billion, outpacing analyst expectations of $25.26 billion.
Looking further ahead to fiscal year 2026, Dell raised its non-GAAP diluted EPS forecast to $9.40 from $9.30 previously, with revenue expected between $101 billion and $105 billion, or roughly $103 billion at the midpoint. These projections exceed the consensus estimates of $9.17 EPS and $102.97 billion in revenue.
In a post-earnings note, Bank of America analysts expressed optimism about Dell’s future, stating, “We see potential for Dell to generate over $30 billion in AI server revenues within the next two years, along with significant upside in EPS, potentially surpassing $3.” Consequently, they increased their price target for Dell shares from $150 to $155.