Dell Retail Traders Shrug Off Q1 EPS Miss As ‘Unprecedented’ AI Server Demand, Cheap Valuation Allay Concerns

Dell Technologies, Inc.’s (DELL) earnings report triggered upbeat reaction from the retailer traders on the Stocktwits platform, with most optimistic about the company’s huge backlog.

By late Thursday, retail sentiment toward the Dell stock was ‘extremely bullish’ (96/100), and message volume was ‘extremely high.’

Most see the stock’s valuation as cheap, especially when weighed against the quarterly performance. According to Koyfin, the forward price-earnings (P/E) multiple is 11.8.

Some also noted Dell’s huge backlog and deemed it positive for partner TSS, Inc. (TSSI).

Round Rock, Texas-based Dell reported revenue of $23.4 billion for the first quarter of the fiscal year 2026, up 5% year over year (YoY) and exceeding the consensus estimate of $23.19 billion. 

The adjusted earnings per share (EPS) climbed 17% to $1.55, missing the consensus estimate of $1.69.

CFO Yvonne McGill said, “All of our core businesses grew as we reached $23.4 billion in revenue in our first quarter, and non-GAAP EPS grew three times faster than revenue.”

Jeff Clarke, chief operating officer at Dell, said first-quarter server and networking revenue was a record $6.3 billion, up 16% YoY, due to “unprecedented demand for our AI-optimized servers.”

“We generated $12.1 billion in AI orders this quarter alone, surpassing the entirety of shipments in all of FY25 and leaving us with $14.4 billion in backlog.”

Dell guided to second-quarter revenue of $28.5 billion-$29.5 billion and adjusted EPS of $2.25 at the midpoint, exceeding the consensus estimates of $25.26 billion and $2.11, respectively.

The full-year guidance calls for revenue of $101 billion-$105 billion and adjusted EPS of $7.99 at the midpoint. Analysts, on average, estimate $102.97 billion and $9.17, respectively.

Peer HP, Inc. (HPQ) fell over 8% on Wednesday following an earnings miss and lowered its full-year guidance to account for tariff impact. 

Dell stock added 1.82% in the after-hours session, while it is down 0.4% this year.

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