Dell Technologies Inc. (DELL) stock is experiencing a surge after the company unveiled better-than-expected second-quarter financial results. Dell’s revenue reached $25.03 billion, surpassing the consensus estimate of $24.14 billion, and adjusted earnings came in at $1.89 per share, exceeding analyst projections of $1.71 per share. These positive figures were reported by Benzinga Pro.
During the conference call, Dell expressed confidence in achieving solid top-line growth in the latter half of the year. The company anticipates adjusted EPS of $1.90 – $2.10 for the third quarter (compared to the consensus of $2.20) and $7.55 – $8.05 for fiscal year 2025 (compared to the street view of $7.70).
Analysts are echoing this optimism. Goldman Sachs analyst Michael Ng maintained a Buy rating with a target price of $155 (previously $160) and increased his FY25/26/27 EPS forecasts by an average of 3%. Ng emphasizes that Dell’s improving AI server margins are likely to boost its valuation multiple and long-term growth prospects. Encouraging signs of growth in traditional servers and storage further bolster this view.
Ng anticipates that Dell’s diverse portfolio will benefit from a recovery in the PC market, growth in its ISG (Infrastructure Solutions Group) driven by its strong presence in enterprise servers and storage, and shareholder-friendly capital returns, including 40-60% of free cash flow.
J.P.Morgan analyst Samik Chatterjee also shared his positive outlook, reiterating an Overweight rating with a price target of $160. Chatterjee highlights the confidence in the AI-driven compute investment cycle, which is expected to benefit Dell’s branded server companies.
While acknowledging that other business segments are facing mixed macro challenges, Chatterjee sees stronger growth in the ISG group, setting the stage for Dell to achieve double-digit earnings growth as it navigates pressures in the PC and general-purpose server markets. Chatterjee also anticipates further gains from a higher valuation multiple tied to AI investments and a potential rebound in PCs, including AI-enhanced models.
Investors interested in gaining exposure to Dell can explore ETFs like Innovator Deepwater Frontier Tech ETF (LOUP) and Return Stacked Bonds & Managed Futures ETF (CHAT), both of which include Dell in their holdings. As of Friday’s closing bell, DELL shares have climbed 3.2% to $114.24.
