Dell Q3 results should provide optimism heading into 2025

Dell Technologies’ (NYSE:DELL) upcoming earnings report next week should demonstrate accelerating growth, but analysts expect stronger gains during the 2025 calendar year.

“We believe DELL’s fundamentals will accelerate further in 2025, led by AI servers, and even before considering any potential share shift from Super Micro Computer (SMCI), which is a key factor supporting our CY25 EPS estimates that are 12% above Consensus,” said Morgan Stanley analysts, led by Erik Woodring, in an investor note on Thursday.

Morgan Stanley applied an Overweight rating on Dell and a $154 price target.

“However, we believe near-term estimates are likely constrained by sub-seasonal PC market trends, a mixed storage backdrop, and flattish Q/Q AI server growth, and thus we don’t expect Oct Q results or mgmt’s Jan Q guide (likely to err on the side of conservatism) to reflect much relative upside to Street revenue or EPS estimates next week, meaning earnings next week are unlikely to be a major catalyst for the stock,” Woodring added.

UBS noted that storage demand for Dell was up year over year, and stronger than competitors, in its latest survey of 76 senior IT executives from around the globe.

Dell all-flash storage demand was rated as “strong” by 71% of respondents. This topped competitors such as NetApp (NASDAQ:NTAP) at 53%, Hewlett Packard Enterprise (NYSE:HPE) at 32% and Pure Storage (NYSE:PSTG) trailing at 20%.

Dell’s overall Storage segment sales were rated as “strong” or “very strong” by 66% of respondents, compared to 57% one year ago. Again, this metric beat competitors as 24% rated HPE this way NetApp received “strong” or “very strong” demand by 37%.

Dell is scheduled to report its third quarter fiscal 2025 results post-market on Tuesday, November 26. A consensus estimate expects adjusted earnings per share of $2.05 on revenue of $24.72B.