Dell Stock Soars 32% on Record AI Server Revenue and Massive Earnings Beat
Mondeum Capital (UK) Limited
Dell just posted its strongest earnings report ever. On Friday, shares soared 32%, marking the biggest one-day gain in the company’s history and the top performance in the S&P 500 that day. The computer and server maker’s first-quarter results beat analyst expectations across the board. Here’s what fueled the surge and why some analysts now see Dell as the top pick for AI exposure.
Dell reported adjusted earnings of $4.86 per share on $43.8 billion in revenue, far above the expected $2.96 per share and $35.7 billion. A year ago, the company earned $1.55 per share on $23.4 billion in revenue. This growth is remarkable.
The main reason for this surge is strong demand for AI servers. Dell brought in $16.1 billion from AI-optimized servers this quarter, up 757% from last year. The company now expects AI server revenue to reach $60 billion by fiscal 2027. For the full year 2027, Dell forecasts revenue between $165 billion and $169 billion, much higher than previous estimates and analyst expectations. For the second quarter, Dell predicts earnings of $4.80 per share at the midpoint, more than double Wall Street’s $2.99 estimate, on revenue of $44 billion to $45 billion compared to the $35.1 billion forecast.
Mizuho increased its price target for Dell to $435 from $350 and kept an Outperform rating, expecting Dell to take over 12% of the global server market by 2026. Melius Research raised its target to $565 from $380 and kept a Buy rating. One analyst at Melius said he had never seen a performance like this in his long career following Dell, calling the company possibly the best way to invest in AI right now.
The earnings report came after Thursday’s news that Dell won a five-year, roughly $9.69 billion contract with the Department of Defense to improve software acquisition for the department, the intelligence community, and the Coast Guard. Dell shares had already closed at a record high on Thursday, and then jumped another 32% after the earnings release.
Featured CoursesRecent news
FedEx Freight Spinoff Starts Trading Monday
FedEx Freight, a major logistics player, will begin trading under its own ticker, FDXF, starting Monday, June 1, marking a long-anticipated spinoff. This move lets investors directly access one of the largest less-than-truckload freight companies in the U.S. Here’s what the new stock is worth, how it compares to its peers, and the factors that […]
SoFi Stock Surges 7.9% to Cap Best Week of the Year on Pure Momentum
SoFi shares have made a comeback, though the reason is unclear. The stock rose 7.9% on Friday with no obvious cause, finishing a four-day streak that pushed the fintech platform up 17% for the week. This was SoFi’s second-best week of the year. Here’s a look at what happened and what this momentum could mean […]
Dell Stock Rises 4.6% on $9.7B Pentagon Deal Ahead of Earnings
Dell is entering its earnings report in a strong position. On Thursday, shares rose 4.6% and were set to close at a record high after the Department of War announced a five-year, $9.69 billion contract with the company. This deal adds a significant government revenue stream to Dell’s already strong AI server business. Here’s what […]
Trade with fewer limits
Day trade with fewer limits at fast speed. Buy stocks and ETFs at low fees.