Dell Technologies Shares Take a Hit After Disappointing Earnings Report

Dell Technologies Inc. (NYSE: DELL) saw its shares decline after the company announced disappointing sales results for the third quarter of its 2025 fiscal year. The results were released late Tuesday, which led to a negative reaction in the market.

The Details: Following the earnings report, Dell's stock fell approximately 6.5% on Tuesday and continued to drop on Wednesday morning. The company reported total sales of $24.37 billion, which fell short of analyst expectations of $24.65 billion. However, this figure still reflects a 10% increase compared to the same period last year.

Dell broke down its sales into two primary segments: the Infrastructure Solutions Group (ISG), which generated $11.4 billion in revenue, and the Client Services Group (CSG), which brought in $12.1 billion. In terms of earnings, Dell reported adjusted earnings per share (EPS) of $2.15, surpassing analyst predictions of $2.05.

Yvonne McGill, the CFO of Dell, commented on the company's performance, stating, “We continued to build on our AI leadership and momentum, delivering combined ISG and CSG revenue of $23.5 billion, up 13% year over year. Our continued focus on profitability resulted in EPS growth that outpaced revenue growth, and we again delivered strong cash performance.”

Despite the current challenges, Goldman Sachs has maintained a positive long-term outlook for Dell. The firm cited strong demand for AI servers and hinted at future opportunities stemming from a delayed refresh cycle for PCs, which is expected to materialize in 2025. They reported substantial AI orders amounting to $3.6 billion, contributing to a backlog of $4.5 billion in AI server orders.

However, Goldman Sachs has also pointed out short-term hurdles, such as weaker demand for PCs and the expected delay in recovering the PC refresh cycle. They noted that while demand for AI servers remains strong, shipments for the Blackwell servers may encounter difficulties due to component availability, which could impact performance in the upcoming quarter.

Current Market Performance: As of the latest report, Dell's stock was trading around 12.9% lower at $123.48, according to data from Benzinga Pro.

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Dell, Earnings, Stocks