Our Dell Stock Pick Is Flying Off the Charts. We're Sticking With it
Dell Technologies stunned Wall Street on its fiscal first quarter earnings report, sending the stock up 32% Friday.That continues a larger rally, with shares now up more than 200% this year. We recommended the stock in October, arguing it had moved beyond personal computers. Indeed, sales of the servers it sells to AI data centers have exploded, just as we had anticipated.In the first quarter, earnings of $4.86 a share crushed analyst estimates of $2.96 and more than tripled year over year.Driving the profit: total sales of $43.8 billion, which beat expectations of $35.7 billion, corresponding to a year-over-year increase of 88%. The growth mainly came from the company's $16.1 billion sales of "AI-optimized servers," which is under the firm's Infrastructure Solutions Group, or ISG, segment. Sales of these servers advanced 757% year over year.Management's $167 billion sales guidance, at the midpoint of the range for fiscal year 2027, was about $24 billion ahead of expectations, accordin