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Dell Technologies (DELL), based in Round Rock, Texas, reported over $100 billion in annual revenue last year and is a leading provider of servers, storage, and PCs. The company’s AI-optimized server segment is its fastest-growing business, boasting year-over-year growth exceeding 700%. Dell’s servers are designed to handle extensive data processing required for AI tasks such as training and inference.
On Tuesday, Super Micro Computer (SMCI), a competitor, exceeded earnings expectations and projected gross margins to nearly double from approximately 8.8% to 15-17%. This shift indicates that Dell, which already operates with higher margins, may see further increases. Additionally, Dell customer OpenAI raised their estimated compute spending through 2030 to about $750 billion, up from $600 billion earlier this year.
According to Zacks Consensus Estimates, Dell’s earnings per share (EPS) is expected to more than double in the current quarter and grow approximately 66% by 2026. The company has delivered notable EPS surprises, including a 59.87% beat last quarter.
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