Gigantic AI-related sales numbers were evidently insufficient to prop up Dell Technologies stock in Thursday’s ‘afterhours’ trade.
Dell (NYSE:DELL) stock was down 17%, to $139.57, adding to the earlier 5% decline in ordinary trading hours.
Nevertheless, Dell's first-quarter earnings release on the face of it made for very bullish reading.
By almost any metric, it was a very strong first-quarter report card for the laptop, PC and server maker.
But, as the old adage goes, sometimes “it is better to travel than arrive”.
Dell shares were up some 127% in 2024 to date prior to the release, with Wall Street buying interest driven by rampant demand (and hype) around its AI-related businesses.
The share price peaked at $179.21 yesterday, after starting the year below $75.
Today, Dell revealed a 6% improvement in year-over-year revenue for its first quarter, reporting a total of $22.2 billion.
That included a doubling of shipments for Dell’s ‘AI-optimized’ servers to $1.7 billion.
At the same time, Dell’s servers and networking unit – which also benefits from the AI boom – experienced a 42% increase in revenue to $5.5 billion. Though the company noted that the unit’s backlog was up 30% to $3.8 billion.
Dell reported some $955 million of net income, which equates to a 65% improvement year-over-year.
"No company is better positioned than Dell to bring AI to the enterprise," chief operating officer Jeff Clarke said in a statement.
While, chief financial officer Yvonne McGill added: "We again demonstrated our ability to execute and deliver strong cash flow, with AI continuing to drive new growth.”
