Overview
- Dell won an Outperform reiteration with a higher $205 price objective from Evercore ISI, which cited stronger demand for AI-focused servers.
- In the latest quarter, Dell’s infrastructure unit posted $19.6 billion in revenue, up 73% year over year, as AI-optimized server sales jumped 352% and the company reported record annual and quarterly revenue.
- Management guides to sharp near-term gains, with revenue expected to rise 51% and earnings to increase 87% in the current fiscal first quarter.
- For the full fiscal year, Dell projects a 103% rise in AI-optimized server sales along with 23% revenue growth and a 33% increase in earnings, and it targets a doubling of AI-server sales by fiscal 2027.
- Dell has been cutting costs and returning cash, including about 11,000 layoffs with $569 million in severance, a 20% dividend increase, and a new $10 billion buyback, while Evercore flags factors like possible Nvidia supply shifts, lower DRAM and NAND prices, and Google’s TurboQuant that could improve server economics.