Dell added to ‘Tactical Outperform’ list ahead of Q3 earnings: Evercore
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Dell Technologies (NYSE:DELL) was added to the Evercore ISI Tactical Outperform list ahead of its third quarter fiscal 2025 financial results due in part to its artificial intelligence exposure.
“DELL is well positioned to report upside to consensus Oct-qtr rev/EPS estimates of $24.69B/$2.07, driven by strength in ISG segment on the heels of storage, general-purpose compute, and AI server strength,” said Evercore analysts, led by Amit Daryanani, in a Wednesday note.
Evercore also expects Dell to report AI server revenue of more than $3.1B during the third quarter, with an AI server backlog ranging from $3.5B to $4B.
“Although upside to AI server sales would dampen margin expectations, we think an incrementally better storage environment will help DELL more than offset those headwinds,” Daryanani added.
“Despite AI server demand, Dell admits AI servers are margin rate dilutive, not margin dollar accretive,” said Seeking Alpha analyst Luca Socci.
Evercore has a $150 price target on the stock. Shares have increased about 85% over the past year.
Dell is scheduled to report its third quarter results post-market on Tuesday, November 26. A consensus estimate expects adjusted earnings per share of $2.05 on revenue of $24.72B.