Dell Technologies (DELL.US) posted impressive second-quarter results, with shares surging by over 12% in pre-market trading. The IT behemoth outperformed Wall Street expectations, reporting a total net revenue of $22.93 billion against an estimated $20.84 billion. The firm's strong performance was driven by robust sales in personal computers and data center hardware, as well as growing contributions from AI-enabled servers. The Commercial client segment alone reported $10.6 billion in sales for the quarter, indicating high demand in workstations.
Most Important Financial Metrics Summary:
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Open account Try demo Download mobile app Download mobile app- Total Net Revenue: $22.93 billion, beating the estimate of $20.84 billion
- Infrastructure Solutions Group Net Revenue: $8.46 billion, a decrease of 11% year-over-year, but beating the estimate of $7.35 billion
- Client Solutions Group Net Revenue: $12.94 billion, beating the estimate of $12.06 billion
- Adjusted Operating Income: $1.98 billion, beating the estimate of $1.5 billion
- Adjusted EPS: $1.74, beating the estimate of $1.14
Morgan Stanley analyst Erik Woodring raised his price target for Dell to a Street high of $70, citing several catalysts for growth, including the firm's October 5 analyst meeting, better execution, and efficient cost management. He noted that AI is already proving to be a long-term tailwind for Dell. Analysts from Wells Fargo and Evercore ISI also raised their price targets, emphasizing Dell's potential for AI-centric revenue acceleration and a possible inclusion in the S&P 500. The company plans to focus on normalizing free cash flow, according to Wells Fargo.
source: xStation 5
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