Dell Earnings Preview: AI in the Spotlight as Rising Memory Costs Squeeze Margins

Dell Technologies, a computer hardware and IT solutions provider, will report earnings Tuesday after the close. Last quarter, revenue grew 19% year over year to $29.78 billion, beating estimates by 1.9%, and the company guided above consensus for both next quarter and the full year. For this quarter, analysts expect revenue of $27.1 billion (+11.2% y/y) and adjusted EPS of $2.47.

Key Highlights

• The company is expanding its server business, which is key to the fast-growing AI market, while its legacy PC segment can stabilize and continue generating steady cash flows.
• Dell’s AI infrastructure business is surging, with $5.6B in AI orders and a record $8.2B in shipments in Q2 FY26, positioning it as a market leader. The company raised its FY26 AI server shipment guidance to $20B, underscoring strong demand and execution confidence.
• Among hardware and infrastructure peers, early Q3 reports offer clues: IonQ posted 222% y/y revenue growth, beating estimates by 47.8%, while Diebold Nixdorf grew revenue by 2%, topping forecasts by 1.7%. Post-earnings, IonQ rose 3.6% and Diebold Nixdorf gained 16.6%.
• Dell’s differentiated AI engineering has made it a market leader, first to ship NVIDIA GB200 NVL72 and GB300 NVL72 systems highlighting speed to market and technical depth. With enterprise AI adoption accelerating and its largest quarter yet for enterprise AI customers, the company sees strong attach opportunities for higher-margin storage, networking, and services.
• Over 70% of Dell’s installed servers are 14th‑gen or older, creating a major refresh opportunity as customers consolidate workloads and improve efficiency.
• Dell’s traditional server business softened in Q2 FY26, with North American demand weaker than expected. Storage revenue fell 3% as large North American accounts slowed, especially in the quarter’s second and third months.
• The company gross margin is a weak 21.26%, with a shift to lower‑margin AI servers weighing on profitability despite record revenue. Additionally, short‑term obligations exceed liquid assets, signaling potential liquidity constraints that could limit flexibility in a downturn.

Analysts Expectation

• Morgan Stanley downgraded Dell to Underweight and cut its price target to $110, citing margin and valuation pressures from a heavier AI server mix and rising component costs.
• BofA Securities cut its Dell price target to $160 from $170 but kept a Buy rating ahead of fiscal Q3 results on November 25.
• Raymond James rates Dell “Outperform” and raised its price target to $161 from $152.

DELL Q3 2025 earnings post-market (4:05 pm ET) Tuesday, November 25, 2025

Technical Analysis Perspective

• Dell broke a rising trendline from the April 2025 low of 66.25 now acting as resistance sat 142–143.
• Shares are consolidating in the 126–117 band.
• The 117 floor has been held since late June 2025, triggering three rebounds.
• Bull case: Clearing 129–130 sets up a move to 142–143 post-earnings.
• Bear case: A clean break below 117 targets 114–110, with a gap toward 106.

Weekly Candlestick Chart

DELL Seasonality Chart

Since 2019, DELL has seen November close with a 2.8% gain in 71% of years and December with a -1.2% decline in 50% of years.

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