DELL changes

Pick any two versions below to diff them.

FromTo

View the full Nov 9, 2026 version

Price: $346.31
Discount category: Below intrinsic value
Next earnings: 2026-11-24
Next earnings is estimate: Yes
Company name: Dell Technologies
Sector: IT hardware & AI servers
About: Dell Technologies sells servers, storage and networking equipment through its Infrastructure Solutions Group (ISG), and PCs, displays and accessories through its Client Solutions Group (CSG). Its AI-optimized servers are now its largest product line. Dell also provides services and, through Dell Financial Services (DFS), financing to its customers. Revenue was $113.5 billion in fiscal 2026, which ended on January 30, 2026, and $47.0 billion in Q2 fiscal 2027 alone. Dell is based in Round Rock, Texas, and it changed its state of incorporation from Delaware to Texas on July 1, 2026.
Thesis: The market doubts that Dell's record AI server earnings can last. Dell guides fiscal 2027 revenue of $192.0 billion and non-GAAP EPS of $25.50, against $113.5 billion and $10.30 in fiscal 2026. AI-optimized servers give most of this growth: Dell expects $74.0 billion of AI server revenue in fiscal 2027, and its AI server backlog was a record $95 billion at July 31, 2026. Investors fear that a small number of large AI customers can slow their orders, that AI servers earn low margins, and that the large backlog uses much working capital. Inventory rose to $21.3 billion at July 31, 2026, from $10.4 billion at January 30, 2026, and cash flow from operations fell 13% in Q2 fiscal 2027. For the gap to close, three things must be true. AI server orders must stay strong after fiscal 2027, so that the backlog does not fall quickly. The ISG operating margin must stay near the 15.0% of Q2 fiscal 2027 as AI shipments grow. Cash flow must recover as inventory turns into revenue, so that buybacks and dividends continue without much more debt. The Q3 fiscal 2027 report, expected in late November 2026, is the next test, and the Q4 report in late February 2027 gives the first fiscal 2028 guidance. If these checks pass, the gap can close over the next four to six quarters. The main reason it may not close is a slowdown in AI data center spending, which can cut Dell's revenue and earnings quickly.
Risks: AI servers give most of the growth, and a small number of large customers place large orders. If AI data center spending slows, orders, revenue and earnings can fall quickly. Dell builds AI servers from processors and memory that a few suppliers make. Supply limits or higher component costs can delay shipments and lower margins. Inventory doubled to $21.3 billion in the first half of fiscal 2027, and cash flow from operations fell 13% in Q2. If AI orders are canceled or delayed, Dell can be left with costly inventory. Total debt was $34.5 billion at July 31, 2026, and Dell sold $8.0 billion of new notes in June and September 2026. More debt makes the company less flexible in a downturn. The PC business is mature and competitive. CSG operating margin was about 7.6% in Q2 fiscal 2027.
Balance sheet: Cash: $11.6B Debt: $34.5B Net debt: $22.9B Debt due within 12 months: $8.5B Dell funds itself with senior unsecured notes and with the debt of Dell Financial Services (DFS), which finances customer loans and leases. At July 31, 2026, total debt was $34.47 billion, of which $8.48 billion is short-term. DFS debt was $9.62 billion, so the rest, mainly senior notes, was about $24.8 billion (a calculation from the 10-Q). Cash and cash equivalents were $11.57 billion. Inventory was $21.29 billion, against $10.44 billion at January 30, 2026. In June 2026, Dell signed a $6.0 billion revolving credit facility that ends in June 2031 and sold $3.0 billion of notes. In September 2026, after the quarter, it sold $5.0 billion of notes to repay its 4.900% first lien notes due 2026. In Q2 fiscal 2027, Dell bought back 9 million shares for $3.86 billion and declared a quarterly dividend of $0.63 per share. As of 2026-07-31.
Checkpoints: Nov 24, 2026 (estimate): Q3 fiscal 2027 results: AI orders and margins. Pending. Watch: Revenue of at least $49.0 billion, non-GAAP EPS of at least $6.50 and a stable or larger AI backlog pass; a smaller backlog or a lower fiscal 2027 outlook fail. Feb 2027 (estimate): Q4 fiscal 2027 results and fiscal 2028 guidance. Pending. Watch: Fiscal 2028 guidance for higher revenue and EPS with better cash flow pass; guidance for lower AI server revenue or lower EPS fails.
Recent events: 2026-10-20: Dell said that Richard Rothberg, its General Counsel, will retire. Christopher Garcia will become chief legal officer on February 1, 2027. 2026-09-15: Dell sold $5.0 billion of senior unsecured notes due 2029, 2031, 2033 and 2037, with interest rates of 5.100% to 5.900%. It said that it will use the money to repay its 4.900% first lien notes due 2026 and for general purposes. 2026-09-01: Dell reported Q2 fiscal 2027 results. Revenue rose 58% to a record $46.97 billion. ISG revenue rose 89% to $31.78 billion, with AI-optimized server revenue of $16.40 billion, and ISG operating margin was 15.0%. CSG revenue rose 20% to $15.03 billion. GAAP EPS was $6.34 and non-GAAP EPS was $7.04. AI server orders were a record $60.9 billion, and the AI server backlog was a record $95 billion. Dell raised its fiscal 2027 guidance to revenue of $192.0 billion and non-GAAP EPS of $25.50, from $167.0 billion and $17.90. It returned a record $4.3 billion to shareholders in the quarter. 2026-07-01: Dell changed its state of incorporation from Delaware to Texas after shareholders approved the change on June 25, 2026. Under the new Texas rules, a shareholder needs at least 3% of the shares to bring a derivative lawsuit against directors or officers. 2026-06-16: Dell sold $3.0 billion of senior unsecured notes due 2031, 2034 and 2037, with interest rates of 4.750% to 5.250%. On June 10, 2026, it signed a new $6.0 billion revolving credit facility that ends on June 10, 2031, and ended its 2021 credit agreement. 2026-05-28: Dell reported Q1 fiscal 2027 results. Revenue rose 88% to $43.84 billion, AI server revenue was $16.13 billion, and AI server orders were $24.4 billion. GAAP EPS was $5.24 and non-GAAP EPS was $4.86. Dell raised its fiscal 2027 guidance to revenue of $165.0 billion to $169.0 billion. 2026-02-26: Dell reported fiscal 2026 results. Revenue rose 19% to $113.54 billion, non-GAAP EPS rose 27% to $10.30, and cash flow from operations was $11.19 billion. Dell shipped more than $25 billion of AI servers in the year and started fiscal 2027 with a record AI backlog of $43 billion. It raised its dividend by 20% and increased its share repurchase authorization by $10 billion.