Dell Technologies shares continued their upward trajectory on Tuesday, climbing 3.4% to $305.21, extending a record close from the previous Friday. The stock's rally comes as traders and investors alike prepare for the company's fiscal first-quarter earnings report, scheduled for release after the market close on Thursday, May 28, followed by a conference call at 3:30 p.m. CDT.
The company has become a bellwether for the AI infrastructure trade, particularly in the hardware segment outside of chipmakers. Dell's server business, which supplies the racks, boxes, and systems powering AI data centers, has seen explosive demand, driving the stock to more than double in 2026. However, the upcoming earnings report will test whether that demand can continue to outpace supply without eroding profit margins.
Key Earnings Expectations
Wall Street analysts, as compiled by Visible Alpha, project Dell to report revenue of $36.18 billion for the quarter, with adjusted earnings per share of $2.97, a significant jump from $1.55 in the same period last year. The company's own guidance, provided in February, called for fiscal 2027 revenue between $138 billion and $142 billion, with AI-optimized server revenue expected to reach approximately $50 billion—more than double the prior year. Chief Operating Officer Jeff Clarke noted at the time that "the AI opportunity is transforming our company," highlighting a record $43 billion backlog for AI servers at the start of the fiscal year.
Options Market Signals Volatility
Options pricing suggests that Dell shares could swing by as much as 10% by the end of the week, according to data from Investopedia. This potential move could either extend the stock's record run or reverse some of the recent gains, depending on how the market interprets the results and forward guidance.
Analyst Sentiment Mixed but Bullish
Analyst views on Dell remain mixed, though the majority lean positive. Evercore ISI has named Dell its top pick in the hardware and networking space heading into earnings, arguing that "AI infrastructure and networking demand remain among the most durable areas of spend." The firm believes Dell and Hewlett Packard Enterprise are well positioned to beat estimates and raise guidance. Bank of America analysts similarly expect Dell to top first-quarter numbers and lift its sales forecast, citing "substantial" demand for both PCs and AI servers.
However, not all analysts are convinced. Morgan Stanley maintains an Underweight rating on Dell with a $170 price target, citing valuation concerns and margin risks. Wells Fargo recently raised its price target to $270 from $180, but even that level is below the current trading price, indicating that much of the optimism is already priced in. Of the seven analysts with active ratings on the stock, six rate it a buy, according to Investopedia.
Margin Pressures and Industry Dynamics
While AI servers generate substantial revenue, they also come with tight margins due to the high cost of advanced chips and memory components. Reuters reported in February that Dell and rival HP Inc. had raised prices to offset rising memory-chip costs. Gabelli Funds analyst Hendi Susanto noted that Dell appeared to be "getting ahead of a challenge" that still affects its competitors, suggesting the company may be better positioned to navigate the margin squeeze.
Nvidia's recent earnings report, which showed first-quarter revenue of $81.62 billion and guidance of $91 billion for the current quarter, reinforced the strength of AI chip demand and kept the spotlight on companies like Dell that build the infrastructure around those chips.
What to Watch
The key risk for Dell is straightforward: if revenue beats expectations but margins remain soft, or if guidance merely meets the elevated bar set by Wall Street, the stock could face a correction given its already lofty valuation. Thursday's report will reveal whether the company can convert its massive backlog into profitable growth fast enough to satisfy investors. The demand is clearly there—the question is whether the economics will hold up.
