To The Moon

$Dell Technologies Inc.(DELL)$ is scheduled to report its fiscal 2025 second quarter on 29 Aug 2024.

Dell Technologies server sales hit a record high last quarter and the long-projected PC refresh is finally showing up on the balance sheet, but investors were disappointed by Dell’s margins on its market-leading servers. And the stock declined more than 20% when it report 2025 fiscal first quarter.

Sales were up six percent year over year to $22.2 billion in its fiscal 2025 first quarter, which ended May 3. Revenue on the infrastructure side of the business was $9.2 billion, up 22 percent year on year, while sales of PCs and peripherals came in flat at $12 billion.

The consensus EPS forecast is estimated to be at $1.71. Capital investments in networking and infrastructure technologies have been reignited, as suggested by Dell's peers ( $HP Inc(HPQ)$ . This could lead to stronger margins in the coming periods.

Can Dell Growth Be Catalysed By Resurgence in PC sales Due To Windows 10 EOS?

As heard from HP Inc CEO, they have seen growth was led by a resurgence in PC sales to businesses. An aging pool of computers and the looming end-of-support for Microsoft Corp.’s Windows 10 helped push companies to upgrade their equipment.

But the sales of consumer-oriented PCs declined 1%. Considering that companies are also having Dell as the main brand for their end user computing devices, will we be seeing the same growth from Dell?

What we need to understand is Dell will be having more server orders as companies move into the technology refresh for 2024 mid-year, so this is an area I would be watching too.

Dell Better Positioned Due To Superior Financial Performance

Amid burgeoning demand and groundbreaking technological advancements, the AI server market is poised for significant expansion in the foreseeable future. Tech giants DELL and HPE both stand to benefit from the AI-fueled future.

However, DELL looks better positioned than HPE because of its superior financial performance, optimistic projections, and strong price performance.

While the average price targets for these two stocks suggest they’re both a little overheated after earnings, Dell is more attractively valued at current levels, and offers more growth potential going forward.

If we looked at how the 2 companies stock price have been trading, HP appear to be perform better, but the recent earnings have caused HP Inc to drop from its stock price.

Dell Technologies (DELL) Price Target Forecast

Based on 12 Wall Street analysts offering 12 month price targets for Dell Technologies in the last 3 months. The average price target is $149.92 with a high forecast of $185.00 and a low forecast of $97.00. The average price target represents a 34.39% change from the last price of $111.56.

I would not be expecting much movement on Dell stock price because the impact from Nvidia earnings might hit Dell as they are already using Nvidia GPU for their server and PCs.

Dell Technologies (DELL) Year To Date Returns

Dell has returned an impressive more than 40% to investors on the stock price, but there might be challenges for Dell to maintain this level of returns.

Considering that there might be some challenges coming onto the technology stocks, we might be seeing Dell adjusting its return in the coming weeks.

Dell Technologies (DELL) Technical (MACD and KDJ)

From the technicals, we are seeing that Dell is going for a potential downward movement based on MACD, and from KDJ, it is already showing a potential downside.

So I would not be hoping for Dell to provide any earning surprise but would look for the guidance and outlook for the AI-enabled server and PCs.

Dell Technologies (DELL) Multi-Timeframe

If we looked at how Dell would be trading from the multi-timeframe, it looked like there might be downside potential based on the timeframe.

So we will need to look at the price action and see if this downside would continue before we decide if we could get in for a potential dip buy.

Summary

Based on how Dell’s peer, HP Inc have given on their outlook, we could be seeing some challenges faced moving forward after the replacement for looming end-pf-support for Microsoft Windows 10 ended.

So how much would Dell customers be upgrading to the same brand remain unknown?

Appreciate if you could share your thoughts in the comment section whether you think Dell would provide a better outlook guidance for their AI-enabled server and PC?

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.