Dell stock falls off despite a Q1 earnings, revenue beat

Dell Technologies (DELL) stock tumbles in Thursday’s after-hours trading even though the computer company shared an all-around earnings beat in its first quarter: $22.24 billion in revenue (expected $21.62 billion) and gains of $1.27 per share (expected $1.23 per share). Dell shares are up by over 120% year-to-date.

Yahoo Finance’s Julie Hyman and Josh Lipton sparse through Dell’s earnings release, focusing on its AI servers segment.

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This post was written by Luke Carberry Mogan.

Video Transcript

We got to get some earnings here.

It’s Dell, the shares are down a quick 8% here.

And that’s after the company came out with earnings that seem to have beat estimates by and large now adjusted earnings per share came out at a buck 27 versus the dollar 23.

That analysts were anticipating revenue also beating estimates adjusted operating income seems very slightly shy.

And the Infrastructure Solutions group, that’s where there’s been a lot of attention on the company that it was benefiting from the A I boom.

Um, that coming out ahead of estimates as well, $9.23 billion versus the 9.06 billion that was estimated.

So, um, it’s not immediately obvious to me why we are seeing the stock down the way that it is down.

I’m trying to take a look at the, um, press release as I know you are as well, Josh to try and figure out what’s going on here.

Yeah, I’m, I’m, I’m looking at first blush.

I agree.

It looks like earnings look decent.

I do wonder, you know, listen, expectations were red hot.

I, I know the stock was down a bit today.

But heading into this print, this was up over 250% over the past 12 months.

Um I mean, investors had moved in because they clearly decided Dell is an A I winner.

A lot of, a lot of interest about A I New A I services and that has meant demand for Michael Dell’s A I servers.

I’m just trying to check one bogey.

I was looking for Julie interest to see what they said about the backlog for A I servers because last time they reported they said that was 2.9 billion.

Now, it looks like they say that um I’m just trying to look through here.

I’m gonna keep trying to find out because I, I wanted to see the comparison year oo over a year and it looks like that backlog is now growing to more than 3.8 billion for those A I optimized servers.

Um So looking through, I, I don’t know if this is a question of expectations but still, still trying to find out where there could be some, some disappoint obviously in, in the print.

Story continues

Yeah, and especially because the stock also pulled back today.

Although to your point, it is done, it’s what more than doubled this year up 100 and 23% even with that small pull back today.

And Bloomberg analyst pointing out going into this report that the stock is trading at 19 times earnings going into its last report.

It was trading at six times earnings.

So it has gotten more expensive as that price has gone higher.

So we’re gonna keep an eye on that one.

It’s been kind of a good old Dell has become a buzzy stuck.

It’s connection as well.

You have to at least once every show.

So that’s why I’m trying to get in.

But it was interesting because Dell has this relationship with NVIDIA and Jensen Wong recently talking about praising the company.

Um high praise from Jensen.

Yeah, I believe that he was at their conference.