Dell Technologies Q2 Results

Investing.com — Dell Technologies reported its second-quarter results on Thursday, exceeding Wall Street estimates, primarily driven by record revenue in its Infrastructure Solutions Group (ISG). This was fueled by strong demand for AI-optimized servers. The company also raised its annual earnings forecast.

Dell Technologies Inc (NYSE:DELL) saw its stock jump over 6% in premarket trading on Friday.

For the three months ending August 2, Dell reported adjusted per-share earnings of $1.89 with revenue of $25.00 billion, surpassing analyst expectations of $1.68 per share and $24.14 billion in revenue.

The Infrastructure Solutions Group, which includes AI-optimized servers and networking hardware, generated record revenue of $11.6 billion, a 38% increase year over year. Record servers and networking revenue was reported at $7.7 billion, up 80% from the previous year.

“Our momentum in ISG is a significant tailwind,” the company stated.

Dell has increased its earnings per share (EPS) guidance for the full fiscal 2025, projecting $7.55 – $8.05, up from a previous estimate of $7.40 – $7.90.

Bernstein analysts commented that while Dell’s AI server metrics were impressive, profitability in this segment remains “challenged.” They estimate that AI server gross margins are between 8% and 14%, with an operating profit margin around 5%.

Goldman Sachs analysts noted that improving AI server margins should support Dell’s valuation and mid-term growth outlook, as they see signs of growth in traditional servers and storage.

“The PC demand recovery – similar to HPQ – has been slower than expected but is anticipated to emerge over the next 12 months.”

_Yasin Ebrahim contributed to this report.