Dell Technologies Inc. (DELL) is having a pretty good Wednesday, and the reason is straightforward: the company just told investors to expect more money than anyone thought they'd make.
The Numbers That Matter: Dell's fourth-quarter guidance came in strong, with expected revenue between $31 billion and $32 billion. That's ahead of what analysts were modeling. More impressively, the company sees earnings per share hitting $3.50, well above the Street's $3.23 estimate.
But the real story is in the full-year picture. Dell boosted its revenue guidance to $111.2 billion to $112.2 billion, up from the previous range of $105 billion to $109 billion. That's not a minor tweak—that's a meaningful upgrade. Adjusted earnings guidance also got a bump, climbing from $9.55 per share to $9.92 per share, versus analyst expectations that were stuck at $9.55.
The third quarter itself was solid too, with Dell beating earnings expectations and posting a quarterly revenue record of $27.01 billion.
AI Is the Plot: Here's where it gets interesting. "AI momentum is accelerating in the second half of the year, leading to record AI server orders of $12.3 billion and an unprecedented $30 billion in orders year to date," said Jeff Clarke, Dell's Chief Operating Officer. "Our five-quarter pipeline is multiples of our $18.4 billion backlog with a mix of neocloud, sovereign and enterprise customers."
Translation: everyone wants AI servers, and Dell is selling them fast. The pipeline—meaning future potential orders—is significantly larger than what they've already booked, which is a good sign for sustained momentum.
Analyst Reactions: Several analysts adjusted their price targets Wednesday morning, likely adding fuel to the rally.
- Mizuho analyst Vijay Rakesh raised his price target to $175 from $170, maintaining an outperform rating.
- BofA Securities analyst Wamsi Mohan bumped the target from $160 to $163 with a buy rating.
- Morgan Stanley analyst Erik Woodring raised his target to $113 from $110, though he kept an underweight rating.
- UBS analyst David Vogt actually lowered his price target to $167 from $186, but maintained a buy rating on the stock.
The consensus view sits at a Buy rating with an average price target of $159.75, suggesting analysts see more upside from current levels.
Price Action: Shares of Dell were trading up 3.95% at $130.94 at the time of reporting.
