What You Need To Know Ahead of Dell Technologies’ Earnings Report

Key Metrics: Operating Margins in Focus

Investors likely will be monitoring Dell’s margins after the company’s first-quarter results showed a double-digit decline in operating income, despite strong demand for AI servers.

Analysts expect operating income to be $1.27 billion, derived from an estimated $24.18 in revenue.

Dell could provide investors with updates Thursday about the company’s efforts to support margin improvement to ease their worries about margin pressures. The company could accelerate cost-cutting efforts to improve margins, similar to its peers like Intel (INTC) and Cisco (CSCO).

Business Spotlight: AI Server Opportunity

Despite concerns about margin pressure affecting the legacy computing company, some analysts have highlighted Dell’s potential to gain from increased demand for AI server hardware.

Bank of America analysts said last week that “although AI server deals remain lumpy (size & timing),” Dell’s management “remains confident in the pipeline and focused on balancing orders, backlog, and shipments growth,” a positive indicator for the company’s AI opportunity.

The analysts said they “remain confident” in the Dell story despite recent volatility in the stock, writing, “the fundamentals of the stock are strong.”

Dell shares were down about 0.6% at $111.35 around 3:30 p.m. ET Monday. The stock has gained 46% year-to-date.