Dell Shares Plunge - Largest Single Daily Decline Ever Since 2018

Shares of Dell Technologies plunged the most in years in premarket trading in New York after the company posted in-line fiscal first-quarter results that showed the first revenue increase since 2022. Despite this positive news, investors were primarily concerned with the performance of the company's artificial intelligence server business, which fell short of expectations.

The Texas-based company said Thursday that sales increased 6.3% to $22.24 billion in the quarter ending May 3. Analysts tracked by Bloomberg estimated an average of $21.62 billion. Profit topped $1.27 a share, beating analysts' estimates of $1.23.

Revenue from Dell's AI servers doubled from the previous quarter to $1.7 billion, Chief Operating Officer Jeff Clarke said in the statement. He noted that the backlog for those servers increased more than 30% quarter-over-quarter to $3.8 billion.

However, Morgan Stanley analyst Erik Woodring pointed out that the strong quarter was overshadowed by the AI server backlog, which fell short of expectations.

Here's a snapshot of earnings:

Adjusted EPS $1.27 vs. $1.31 y/y, estimate $1.23

Total net revenue $22.24 billion, estimate $21.62 billion

Infrastructure Solutions Group net revenue $9.23 billion, +22% y/y, estimate $9.06 billion

Servers and Networking revenue $5.47 billion, estimate $4.89 billion

Storage revenue $3.76 billion, estimate $3.98 billion

Client Solutions Group net revenue $11.97 billion, -0.1% y/y, estimate $11.51 billion

Commercial revenue $10.15 billion, estimate $9.66 billion

Consumer revenue $1.81 billion, estimate $2.06 billion

Adjusted operating income $1.47 billion, estimate $1.48 billion

Second quarter forecast:

Sees revenue $23.5 billion to $24.5 billion, estimate $23.17 billion

Full-year forecast:

Sees revenue $93.5 billion to $97.5 billion, estimate $94.62 billion

Sees adjusted EPS $7.40 to $7.90, estimate $7.70

With AI server sales and backlog failing to impress investors, shares of Dell tumbled 15% in premarket trading. If premarket gains hold into the cash session and settle more than -13% (Aug. 26, 2022) by the end of the session - this would be the largest single daily decline ever since re-entering public markets in late 2018.

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17 replies (most recent on top)

How could the stock be falling?! We keep saying AI over and over. That’s as good as gold… right?

Well yeah, they laid off everyone who was producing things to pad their numbers, paid useless executives more, and then are living on a smoke and mirrors “strategy” where they just hope if they say the word AI enough money will magically appear.

Wow Dell stock dipped below $130. This feels a lot like dogecoin.

vibes of the dot.com ride back in the day; we know what the stock did after that

Huge con. Dell is just a massive con job. They basically just flat out lied to their shareholders. Dell is close to Enron in that way.

Meanwhile super micro revenue up 200%, operating income up 300% YOY.

Dell operating income negative 18 YOY decline.

Biggest AI bull run in history yet the genius leaders innovate ways to lose money.

More layoffs ahead to make the numbers look better next quarter. Get ready for it!

Only $3.76 billion in storage revenue? EMC did better than that just shows what p@ss poor managed company Dell is.

All smoke and mirrors. Dell literally is just telling stories. That’s it. Biggest con job ever.

JC is gonna push his tshirts more in all hands calls to make up the difference.

"Oohhhh where can i get that shirt!!??"

🤢🤢🤢

Jim Cramer/ Shares tumbled more than 21% after the server and PC maker's earnings failed to meet Wall Street's sky-high expectations, particularly due to margin pressures. https://stocks.apple.com/Aoijv8y_eQaaYnqZ6IriBDw

Wow can't seem to make a profit off of AI, customer data breach, stock plunging. Probably only one thing the know-nothing crew will do next.

🤣🤣

Sold it all last week at $152. WOOT!!!!

Lol and Dell’s owners, Steve Cohen and friends, just got their casino deal shut down by lawmakers

Thank you so much for this post!

It looks like no profit is being made on AI servers. Are the ai optimized servers being used by customers for AI? Or are they selling AI servers at a discount to companies who will not leverage ai? It makes sense to boost stock to push these things out the door at cost with no use case if it continues to inflate the stock price. Selling AI at a loss doesn't make much sense unless it's all about market hype and stock price.

Thread regarding Dell Inc. layoffs

Dell Shares Plunge - Largest Single Daily Decline Ever Since 2018

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