Dell Stock Tumbles Despite Surging AI Demand as Weak Q3 Profit Forecast Spooks Investors

Tech giant Dell faces investor backlash as conservative Q3 projections overshadow massive AI server demand.

Wall Street's Reality Check

While AI-driven server orders hit record highs, Dell's cautious profit guidance sent shares plunging—another reminder that hype doesn't pay quarterly dividends. The company's infrastructure division rakes in billions from AI deployments yet management's timid outlook suggests they know something the buzz doesn't: enterprise budgets are tightening.

AI Boom Meets Profit Gloom

Dell's servers fly off shelves like discounted gadgets during Black Friday, but their financial forecast reads like a clearance sale memo. The disconnect between roaring demand and defensive guidance leaves analysts scratching heads—and shareholders dumping stock. When your hottest product line can't buoy your bottom line, maybe the problem isn't the market—it's the margins.

Another quarter where 'future potential' gets slaughtered by present-day accounting. Maybe they should accept payment in GPU clusters instead of dollars.

KEY TAKEAWAYS

• Dell Technologies shares sank in premarket trading Friday, a day after it projected soft current-quarter profit.
• Dell Chief Operating Officer Jeff Clarke said "exceptional" demand for its AI solutions has led the company to lift its full-year AI server shipment guidance to $20 billion.
• Citi analysts said the increased AI server shipment guidance is good news for Nvidia and Micron Technology.

Dell Technologies (DELL) shares sank in premarket trading Friday, a day after it projected soft current-quarter profit.

The Round Rock, Texas-based Maker of personal computers and servers sees third-quarter adjusted earnings per share (EPS) of $2.45 at the midpoint, below the $2.49 expected by analysts surveyed by Visible Alpha.

Dell shares, which entered Friday up 16% this year, dropped 7% in premarket trading.

Dell's forecasts for Q3 revenue and full-year profit and revenue came in above Visible Alpha consensus. Its second-quarter adjusted EPS of $2.32 on revenue that surged 19% year-over-year to a record $29.78 billion also topped estimates, which the company attributed to strong AI demand.

"We've now shipped $10 billion of AI solutions in the first half of FY26, surpassing all shipments in FY25. This helped deliver another record revenue quarter in our Servers and Networking business, which grew 69%," COO Jeff Clarke said. "Demand for our AI solutions continues to be exceptional, and we're raising our AI server shipment guidance for FY26 to $20 billion" from $15 billion-plus.

Citi analysts said in a note Friday that Dell's Q2 PC segment sales were below consensus forecasts "by 3% or roughly $357.0 million," and that it "likely lost share in PCs." It added that the increase in its AI server shipment guidance is good news for Nvidia (NVDA), which makes up 88% of its sales, and Micron Technology (MU), at 17%. "Dell expects the traditional server business to grow in the 2nd half but below their prior expectations from the beginning of the year," the analysts wrote.