Evercore ISI Optimistic on Dell’s Upcoming Q2 Earnings

Dell Technologies (NYSE:DELL) is expected to be "well-positioned" for its upcoming earnings report on July 29, according to Evercore ISI analysts, who anticipate the company will meet or exceed current consensus estimates of $24.14 billion in revenue and $1.68 in EPS for Q2. Analysts attribute this optimism to stronger demand across Dell's core segments, including x86 servers, PCs, and storage, with potential upside from AI server shipments.

Evercore highlighted that investor focus will likely be on Dell’s Infrastructure Solutions Group (ISG) margins. Concerns have risen over AI server margins following Super Micro Computer's (SMCI) recent margin struggles. However, Evercore believes Dell may counter this by showing that Q1 margin weakness stemmed from storage business issues rather than dilution from AI servers.

Additionally, concerns have surfaced following recent reports of layoffs at Dell, coming after the company's significant headcount reduction earlier this year. Despite these issues, Evercore remains confident that demand has strengthened across Dell's key businesses, including x86 servers, PCs, and storage, particularly in the flash segment, positioning Dell for a solid performance in the quarter ahead.