We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Dell Reports Tuesday With Our Model Flashing Green
There is a version of this evening’s announcement that writes itself.
Dell Technologies reports fiscal second-quarter results after Tuesday’s close, and virtually every indicator we track is pointed in the same direction.
The Zacks Rank sits at #1 (Strong Buy). The Earnings ESP (Expected Surprise Prediction) indicator is +6.2%, signaling a beat is likely. The industry group ranks in the top 18%. Estimates have been revised sharply higher.
Translation: our model rarely lines up this cleanly.
The complication is that the market already knows. Shares have climbed roughly 265% year to date and about 13% in the past month alone, against a 3.3% gain for the S&P 500. When a stock has nearly quadrupled, the interesting question stops being whether the company will beat and becomes whether beating is still enough.
Image Source: StockCharts
Digging Into the Numbers
The Zacks Consensus Estimate calls for earnings of $4.95 per share, an increase of 113.4% from the year-ago period, on revenues of $45.34 billion, up 52%. Those growth rates are extraordinary for a company of Dell’s size and history, and they reflect a genuine transformation rather than a cyclical bounce.
Encouragingly, the consensus has been revised 1.43% higher over the past 60 days. Estimate revisions are the engine of the Zacks Rank, and analysts moving numbers up into a print is exactly the pattern that precedes positive surprises.
Image Source: Zacks Investment Research
Management’s own guidance called for revenue of $44.0 billion to $45.0 billion, up 49% at the $44.5 billion midpoint. Consensus sitting above the high end of guidance tells you analysts believe Dell was conservative. For the full year, the company guided to $165 billion to $169 billion in revenue, up 47% at the midpoint — and JPMorgan has suggested Dell could raise that outlook again Tuesday.
The Model Setup Is Unusually Strong
Dell carries a Zacks Rank #1 (Strong Buy) paired with a positive Earnings ESP of +6.2%. Our research shows that when a positive Earnings ESP combines with a Zacks Rank of #3 or better, a positive earnings surprise follows roughly 70% of the time.
A +6.2% reading is not marginal — it means the most accurate recent estimates sit meaningfully above consensus, which is analysts with the freshest information signaling that $4.95 may be too low.
The industry backdrop reinforces it. Dell belongs to the Zacks Computer – Micro Computers group, ranked 44 out of 248 industries, placing it in the top 18%. Since roughly half of a stock’s price appreciation is attributable to its industry grouping, and the top half of Zacks-ranked industries outperforms the bottom half by more than two to one, that is a meaningful tailwind.
What’s Actually Driving the Business
The engine is the Infrastructure Solutions Group, and specifically AI-optimized servers. Consensus looks for ISG operating income of $3.38 billion this quarter against $1.47 billion a year ago — a 130% increase. That single line explains most of the story.
Last quarter was the proof point. Dell delivered non-GAAP EPS of $4.86, beating consensus by roughly 60%, on revenue that surged 88% year over year, and shares jumped about 32% the following session. The company disclosed a $24.4 billion AI order backlog and framed a roughly $60 billion AI-server opportunity.
What has changed the narrative beyond the numbers is customer quality. Partnerships with SpaceX and CoreWeave have repositioned Dell from a legacy hardware vendor into a core supplier for frontier AI infrastructure.
Valuation and the Bar
Here is the tension. The stock has quadrupled, and at forward earnings, Dell trades around 25.7 times — a multiple that is above its peers but entirely reasonable given its growth rate.
At the same time, Dell (DELL - Free Report) is expensive relative to its own history and cheap relative to its earnings trajectory. Which framing wins depends on whether you believe the AI server cycle has years left or quarters. The sell side leans toward years: the average target among 27 analysts sits near $510, with Wells Fargo recently raising its objective to $545.
Bottom Line
For investors, the setup into Tuesday is about as favorable as our framework produces: a Zacks Rank #1, a +6.2% Earnings ESP, a top-18% industry group, estimates revised higher into the print, and a management team that has guided conservatively and beaten decisively.
The reality is, however, that none of this is secret. A stock up 265% year to date has already priced in a great deal of good news, and we have watched several AI-linked names beat handsomely this season only to sell off on anything short of perfection.
Guidance for the October quarter — and any update to that $165–169 billion full-year range — will likely matter more than the quarter itself.
View the Zacks #1 Rank List
Image: Bigstock
Dell Reports Tuesday With Our Model Flashing Green
There is a version of this evening’s announcement that writes itself.
Dell Technologies reports fiscal second-quarter results after Tuesday’s close, and virtually every indicator we track is pointed in the same direction.
The Zacks Rank sits at #1 (Strong Buy). The Earnings ESP (Expected Surprise Prediction) indicator is +6.2%, signaling a beat is likely. The industry group ranks in the top 18%. Estimates have been revised sharply higher.
Translation: our model rarely lines up this cleanly.
The complication is that the market already knows. Shares have climbed roughly 265% year to date and about 13% in the past month alone, against a 3.3% gain for the S&P 500. When a stock has nearly quadrupled, the interesting question stops being whether the company will beat and becomes whether beating is still enough.
Image Source: StockCharts
Digging Into the Numbers
The Zacks Consensus Estimate calls for earnings of $4.95 per share, an increase of 113.4% from the year-ago period, on revenues of $45.34 billion, up 52%. Those growth rates are extraordinary for a company of Dell’s size and history, and they reflect a genuine transformation rather than a cyclical bounce.
Encouragingly, the consensus has been revised 1.43% higher over the past 60 days. Estimate revisions are the engine of the Zacks Rank, and analysts moving numbers up into a print is exactly the pattern that precedes positive surprises.
Image Source: Zacks Investment Research
Management’s own guidance called for revenue of $44.0 billion to $45.0 billion, up 49% at the $44.5 billion midpoint. Consensus sitting above the high end of guidance tells you analysts believe Dell was conservative. For the full year, the company guided to $165 billion to $169 billion in revenue, up 47% at the midpoint — and JPMorgan has suggested Dell could raise that outlook again Tuesday.
The Model Setup Is Unusually Strong
Dell carries a Zacks Rank #1 (Strong Buy) paired with a positive Earnings ESP of +6.2%. Our research shows that when a positive Earnings ESP combines with a Zacks Rank of #3 or better, a positive earnings surprise follows roughly 70% of the time.
A +6.2% reading is not marginal — it means the most accurate recent estimates sit meaningfully above consensus, which is analysts with the freshest information signaling that $4.95 may be too low.
The industry backdrop reinforces it. Dell belongs to the Zacks Computer – Micro Computers group, ranked 44 out of 248 industries, placing it in the top 18%. Since roughly half of a stock’s price appreciation is attributable to its industry grouping, and the top half of Zacks-ranked industries outperforms the bottom half by more than two to one, that is a meaningful tailwind.
What’s Actually Driving the Business
The engine is the Infrastructure Solutions Group, and specifically AI-optimized servers. Consensus looks for ISG operating income of $3.38 billion this quarter against $1.47 billion a year ago — a 130% increase. That single line explains most of the story.
Last quarter was the proof point. Dell delivered non-GAAP EPS of $4.86, beating consensus by roughly 60%, on revenue that surged 88% year over year, and shares jumped about 32% the following session. The company disclosed a $24.4 billion AI order backlog and framed a roughly $60 billion AI-server opportunity.
What has changed the narrative beyond the numbers is customer quality. Partnerships with SpaceX and CoreWeave have repositioned Dell from a legacy hardware vendor into a core supplier for frontier AI infrastructure.
Valuation and the Bar
Here is the tension. The stock has quadrupled, and at forward earnings, Dell trades around 25.7 times — a multiple that is above its peers but entirely reasonable given its growth rate.
At the same time, Dell (DELL - Free Report) is expensive relative to its own history and cheap relative to its earnings trajectory. Which framing wins depends on whether you believe the AI server cycle has years left or quarters. The sell side leans toward years: the average target among 27 analysts sits near $510, with Wells Fargo recently raising its objective to $545.
Bottom Line
For investors, the setup into Tuesday is about as favorable as our framework produces: a Zacks Rank #1, a +6.2% Earnings ESP, a top-18% industry group, estimates revised higher into the print, and a management team that has guided conservatively and beaten decisively.
The reality is, however, that none of this is secret. A stock up 265% year to date has already priced in a great deal of good news, and we have watched several AI-linked names beat handsomely this season only to sell off on anything short of perfection.
Guidance for the October quarter — and any update to that $165–169 billion full-year range — will likely matter more than the quarter itself.