The company beat analysts' expectations and offered rosy guidance on Thursday, but it wasn't enough to appease Wall Street.Dell Technologies CEO Michael Dell speaks during the MWC session 'New strategies for a new era' on the first day of the 18th edition of the Mobile World Congress at Fira de Barcelona's Gran Via venue in L'Hospitalet de Llobregat on February 26, 2024, in Barcelona, Catalonia, Spain.
Bernstein analysts said the "principle disappointment" in Dell's results was that operating margins for its Infrastructure Solutions Group compressed year over year. Additionally, operating profits were flat compared to the same period last year, even though the company brought in around $1.7 billion in incremental AI server revenues.
"On net, relative to very high expectations, Dell's Q1 25 results were disappointing," the analysts wrote in a note Friday. "We reiterate Buy given that we are still in the early stages of AI adoption with continued strong pipeline and momentum around AI servers, where we think DELL will be able to capture higher AI margins over time," the analysts said in a note Thursday.
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