Dell Earnings Preview: Can Dell Climb Higher on AI Strength?
Dell Earnings Preview: Can Dell Climb Higher on AI Strength?
- Dell is scheduled to report first quarter earnings on Thursday, May 28, after the market close.
- The stock is up over 140% since the start of the year compared to a 9% gain in the S&P 500.
- Options on the stock show an expected move of +/- 28.95 points.
Dell earnings: traders want to see healthy margins as market share expands
Dell is scheduled to report fiscal first quarter results on Thursday, May 28, after the market close.
The earnings come amid an enthusiastic backdrop for technology stocks, particularly those related to artificial intelligence.
Dell has benefited immensely from the jubilance around the AI trade, with its stock price up over 140% since the start of the year. The S&P 500 is up 9% over the same period.
After Dell’s last report on February 26, the stock rallied nearly 22% in a single day. Dell posted record revenue of $113.5 billion for the full year. Since then, the stock has sustained its momentum higher as the potential for further growth fuels speculation in the stock.
Dell closed its fiscal 2026 with a record $43 billion backlog for optimized server orders from a total $64 billion in commitments. The market grabbed onto that, viewing it as evidence of Dell’s business model in capturing AI infrastructure investment.
That said, investors will want to see continued momentum in AI server revenue and backlog. One issue that analysts are concerned about is memory prices. However, executives stated on the last earnings call that they are confident that the company can adapt to changing memory prices and sustain mid-single-digit margins.
What do analysts expect?
According to TradingView, analysts expect first quarter earnings per share (EPS) to come in at $2.96 on $35.74 billion in revenue. A year ago, Dell posted EPS of $1.55 on $23.38 billion in revenue.
Beyond revenue, analysts are looking at operating margins. As AI server volume scales, it will matter not only if Dell can continue to gain market share, but if it can do it while maintaining healthy margins. This will matter most in the Infrastructure Solutions Group (ISG) more so than in the Client Solutions Group (CSG), with the latter representing its business for PCs, laptops, and workstations.
Trading Dell earnings
Dell trades with a 99.5 implied volatility rank (IVR), meaning that volatility is substantially elevated in the stock compared to the past year of trading.
Options on the stock show an expected move of +/- 28.95 points, or about 7.5% of the stock price.
Technically, Dell is trading near all-time highs, so there isn’t much in the way of resistance that can be clearly mapped out. Should earnings impress, new all-time highs are likely for the stock. Alternatively, a disappointing report could send prices lower.
A move to the downside of the expected range would bring prices close to the early May swing high at 263.99, which could offer some technical support.
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.
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