DELL Set to Report Q2 Earnings: Buy, Sell or Hold the Stock?

Dell Technologies DELL is scheduled to report its second-quarter fiscal 2026 results on Aug. 28.

For the second quarter of fiscal 2026, revenues are expected to be between $28.5 billion and $29.5 billion, with the mid-point of $29 billion suggesting 16% year-over-year growth. Non-GAAP earnings are expected to be $2.25 per share (+/- 10 cents), indicating 15% growth at the mid-point.

The Zacks Consensus Estimate for second-quarter revenues is pegged at $29.32 billion, suggesting 17.15% growth from the figure reported in the year-ago quarter.

The consensus mark for quarterly earnings is pegged at $2.31 per share, up by 1.3% over the past 30 days, and suggesting year-over-year growth of 22.22%.

Dell Technologies Inc. Price and EPS Surprise

Dell Technologies Inc. price-eps-surprise | Dell Technologies Inc. Quote

Dell Technologies’ earnings beat the Zacks Consensus Estimate in all the trailing three quarters, while missing the same in one quarter, with an earnings surprise of 2.26% on average.

Let’s see how things have shaped up for DELL shares prior to this announcement.

Key Factors to Note for DELL

Dell Technologies’ fiscal second-quarter results are expected to benefit from the robust demand for AI-optimized servers, driven by ongoing digital transformation and heightened interest in generative AI applications. 

In the second quarter of fiscal 2026, Dell Technologies anticipates 19% growth at the midpoint for the combined ISG and CSG, with ISG growing significantly and CSG up to a low-to-mid single digit.

The Zacks Consensus Estimate for DELL’s fiscal second-quarter 2026 ISG revenues is currently pegged at $15.955 billion, indicating 27% year-over-year growth. The consensus mark for CSG is pegged at $12.894 billion, suggesting 3.86% year-over-year growth.

The growing AI market and Dell Technologies’ leadership in AI-optimized servers, including the PowerEdge 9680, are expected to have been a tailwind in the to-be-reported quarter. In the first quarter of fiscal 2026, DELL’s AI-optimized server momentum saw an increase of $12.1 billion in orders. The company shipped $1.8 billion worth of AI servers in the fiscal first quarter, and the AI server backlog remained healthy at $14.4 billion. 

However, the challenging macroeconomic environment and tariff-related uncertainties do not bode well for Dell’s prospects. Fierce competition in a rapidly evolving tech landscape continues to put pressure on the company.

DELL Shares Outperform Sector, Industry

Year to date, Dell Technologies’ shares have rallied 13.7% compared with the broader Zacks Computer & Technology sector’s return of 12.5%. The Zacks Computer - Micro Computers industry declined 8.5% in the same time frame.

Dell Technologies shares have also outperformed its peer, Hewlett-Packard HPE, which is also expanding its footprint in the server space. Hewlett-Packard is benefiting from robust demand for its AI-optimized servers, leading to significant revenue growth in its server segment. Hewlett-Packard shares have returned 5.7% in the year-to-date period.

DELL Stock's Performance

DELL Shares Trading Cheap

Dell Technologies shares are cheap, as suggested by a Value Score of B.

DELL stock is trading at a significant discount with a forward 12-month P/S of 0.82X compared with the Computer and Technology sector’s 6.67X.

DELL's Valuation

DELL Benefits From Expanding Clientele

DELL’s expanding partner base that includes the likes of NVIDIA NVDA, Lowe’s Companies LOW, Worley, Microsoft, Meta Platforms, Advanced Micro Devices, and Imbue is likely to have driven growth during the fiscal second quarter.

In August 2025, Dell Technologies announced major updates to its AI Data Platform, introducing a new unstructured data engine with Elastic and NVIDIA-powered acceleration to streamline AI workloads from data ingestion to agentic inferencing. Benefits from this partnership with NVIDIA are likely to have been reflected in the to-be-reported quarter’s performance.

In June 2025, Dell Technologies partnered with Lowe’s Companies to enhance customer and associate experiences by deploying advanced AI and PC technologies. Using Dell AI Factory with NVIDIA and high-performance Dell devices, Lowe’s Companies is optimizing inventory, improving asset protection, and streamlining store operations across its network.

What Should Investors Do With DELL Stock?

Dell Technologies benefits from rising demand for AI-optimized servers and an expanding partner network. The company’s innovation in AI infrastructure and positive earnings outlook support long-term strength.

DELL currently has a Zacks Rank #2 (Buy), suggesting that investors should start accumulating the stock right now. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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