Dell’s Big Bet on AI: Will It Deliver a Q3 Earnings Surprise?

Dell Technologies ($DELL) is set to release its earnings on November 26, and I’ve been looking into whether they’ll deliver strong results. With AI driving a lot of their growth recently, the big question is—can they keep the momentum going? Let’s break it down.

What Does Dell Do, and Why Is AI So Key?

Dell has always been about IT—PCs, laptops, servers—but lately, they’ve gone all-in on AI infrastructure. They’re building the backbone for AI applications, especially with their AI-optimized servers. This shift isn’t just hype; it’s bringing real growth.

Related: Check out how Semtech ($SMTC) is approaching its Q4 earnings to see another company leveraging tech innovation in its growth strategy.

What Are Analysts Expecting from Dell?

For this quarter, the numbers are solid. Revenue estimates sit at $24.53 billion, with earnings per share (EPS) expected at $2.07. Last quarter, Dell blew past expectations with $25 billion in revenue (+9% YoY) and an EPS of $1.89. Most of that growth came from their AI products—servers were the real MVP.

Related: Curious about other earnings this season? Read Palo Alto Networks Q1 Earnings Insights and see how cybersecurity trends compare to Dell's AI momentum.

How Are Dell’s Competitors Doing?

The tech sector as a whole is trending up, and Dell’s competitors are crushing it:

• Cisco beat earnings and raised guidance, showing strong demand for networking and AI hardware.
• NVIDIA delivered a massive $35 billion in sales, solidifying its AI dominance.
• NetApp had strong earnings and raised its guidance, signaling that demand across the board is solid.

This momentum in the industry is a great sign for Dell.

Related: While Dell benefits from AI, Intuitive Machines ($LUNR) is finding growth opportunities in aerospace with NASA contracts. Different industries, but growth stories nonetheless.

Are There Risks?

Sure, Dell isn’t invincible. Here’s what could trip them up:

1. Economic Slowdowns: If companies start slashing IT budgets, Dell’s sales could take a hit.
2. Debt Levels: Dell has a lot of debt, and while manageable now, it could become an issue if cash flows slow.
3. Competition: The AI infrastructure space is packed with heavy hitters, and staying ahead won’t be easy.

Will Dell Beat Earnings?

Honestly, it looks likely. AI demand is still strong, their peers are performing well, and analysts are optimistic about Dell’s positioning. Everything points to them hitting or exceeding expectations.

What Happens If They Beat?

If Dell beats earnings, I think the stock will see a modest bump. A lot of the AI hype is already priced in, so don’t expect a huge jump unless they completely blow revenue out of the water or drop some very bullish guidance.

Final Thoughts: Is Dell a Buy Before Earnings?

Dell’s AI story is compelling, and they’ve proven they can deliver. For this quarter, I think they’ll beat expectations, but the stock probably won’t skyrocket unless there’s a big surprise. Still, Dell’s position in AI makes them worth watching as this space evolves. Let’s see what November 26 brings!

Related: If you’re curious about another stock with challenges and potential, check out Is SMCI Getting Delisted? for insights into risks and recovery strategies in the tech sector.

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