Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Shares in Dell (NYSE:DELL) edged lower in premarket U.S. trading after the Texas-based group predicted that it would post a drop in adjusted gross margin in its 2026 fiscal year.
Weighed down by increasing costs associated with building out its AI servers, as well as tepid demand for its PCs, Dell said its full-year adjusted gross margin rate would fall by around 100 basis points.
Speaking to analysts, Chief Operating Officer Jeff Clarke also flagged that Dell is gauging the possible effect of U.S. President Donald Trump’s tariff plans on input costs. Clarke noted that should these expenses rise, "it may require us to adjust prices."
Still, Dell forecast a 53% year-over-year jump in annual AI server shipments to $15 billion. The products, which feature Nvidia (NASDAQ:NVDA) chips and compete with servers from rival Super Micro Computer (NASDAQ:SMCI), can handle the massive amounts of computational demand needed to power and train AI models.
Dell’s margins and the impact of potential U.S. tariffs will “remain watchpoints” for investors, analysts at JPMorgan said.
For the fourth quarter, Dell reported adjusted earnings per diluted share (EPS) of $2.68 on revenue of $23.93 billion, compared with estimates for $2.53 per share and $24.56 billion, respectively.
The company also forecast current-quarter adjusted diluted per-share income of $1.65 and sales in a range of $22.5 billion and $23.5 billion, missing estimates for adjusted per-share profit of $1.83 and revenue of $23.72 billion.
Full-year 2026 adjusted diluted EPS was expected to be $9.30 on revenue between $101.0 billion and $105.0 billion, versus expectations of $9.29 and $103.62 billion.
Dell also increased its annual cash dividend by 18% to $2.10 per common share and announced a $10 billion jump in its stock buyback program.
"[T]here are a lot of puts-and-takes, but pluses [...] slightly outweigh minuses [...]," analysts at Vital Knowledge said in a note to clients.
(Yasin Ebrahim contributed reporting.)