Dell stock falls 8% despite positive Q1 earnings, revenues

Dell Technologies’ stock fell -8% in after-hours trading on Thursday, despite an all-around earnings beat in its first quarter. The company reported $22.24 billion in revenue and gains of $1.27 per share, beating analysts’ expectations by a large margin.

Dell shares are up by over 120% year-to-date. The company’s earnings seem to have beat estimates by a large margin, with adjusted earnings per share coming out at a dollar 27 versus the dollar 23. Analysts were anticipating revenue also beating estimates, but adjusted operating income seems slightly shy.

Dell posted better-than-expected results for its April quarter, boosted by strong demand for AI-powered servers and improvement in the commercial personal-computers business.

The company reported first-quarter earnings that beat analyst estimates for earnings and sales, as it has emerged as one of the top vendors for artificial intelligence servers. Dell said it would issue guidance for the current quarter on the call.

Dell reported $955 million in net income during the quarter, or $1.32 per diluted share, versus $578 million, or 79 cents, in the year-ago period. Overall sales during the quarter were up 6% on an annual basis. Dell’s division including data center sales, called Infrastructure Solutions Group, saw sales rise 22% on an annual basis to $9.2 billion.

Dell has emerged as a top vendor for AI-oriented servers, which are in high demand as companies invest in infrastructure for predictions and generative AI. Dell recorded $2.6 billion of “AI-optimized” server orders during the quarter.