Key Takeaways:
- Dell will release its Q4 FY25 earnings report this Thursday after the market’s close.
- Analysts are anticipating revenue increases, driven by robust performance in enterprise servers and networking. Data centers are thriving!
- The long-term perspective on AI servers is somewhat guarded, with some analysts foreseeing possible short-term obstacles.
Dell Technologies (DELL) is scheduled to unveil its fiscal Q4 2025 results following the close of trading on Thursday. The consensus (Wall Street’s view) is that revenue is poised to surge, thanks to high demand for their server and networking offerings.
Of the seven analysts monitored by Visible Alpha, a substantial six are assigning Dell a “buy” or comparable rating. Only one is taking a conservative stance with a “hold.” The average price objective is approximately $148, suggesting a potential 30% increase from Monday’s closing price. Pretty good!
The PC leader is projected to declare adjusted earnings per share (EPS) of $2.51 on net sales of $24.56 billion. That’s an improvement from last year’s $2.20 EPS and $22.32 billion in sales. The Infrastructure Solutions Group (servers, networking – the valuable assets) is forecasted to achieve a record $11.74 billion in revenue, a year-over-year rise of over 25%.
AI Server Revenue: Near-Term Obstacles Looming?
Bank of America recently reduced its price target to $150 (from $155) but is maintaining a “buy” rating. Their rationale? AI server revenue might experience some volatility in the short term due to persistent supply chain problems with Nvidia’s (NVDA) Blackwell chips. They are expecting a sequential decline in AI server revenue, but anticipate Dell to demonstrate strong AI order growth. So, demand exists, but obtaining the chips could be the bottleneck.
Morgan Stanley also decreased their price target earlier this month (to $128 from $154), citing continued uncertainty in the near-term forecast, even with robust demand for AI servers. Essentially, the AI server boom is real, but the path to profitability might not be entirely smooth for Dell at present.”
Rumor has it that Dell is nearing the completion of an agreement to vend servers worth over $5 billion to Elon Musk’s xAI. These servers will harness the power of NVIDIA’s premier GB200 processors. Despite a slight dip in Dell’s stock value on Monday, experiencing a decrease of approximately 3%, it remains buoyant, having surged by more than 23% in the preceding year.
