Dell Stock Rallies After Lenovo’s Results Signal PC Recovery – What Do Analysts Expect From Its Q1 Report Tomorrow?

• DELL has gained over 25% since Lenovo reported its results.
• Lenovo’s March quarter revenue rose 27% to $21.6 billion, the highest growth rate in five years, and net income rose by a factor of six.
• Dell will report its fiscal first quarter results on Thursday; Stocktwits sentiment improved to ‘bullish’ as of Tuesday.

An upbeat report from Chinese PC and notebook maker Lenovo last week has boosted Dell Technologies as it heads into its quarterly report, due after the U.S. markets close on Thursday.

Lenovo reported record fourth-quarter revenue and its strongest full-year results ever, signaling a recovery in the previously stressed PC market as newer AI-capable computers revive demand. 

Lenovo’s March quarter revenue rose 27% to $21.6 billion, the highest growth rate in five years, and net income rose by a factor of six to reach $521 million. The company’s Hong Kong-listed stock surged 19% on Friday, after the results were released, and has continued to climb sharply.

Consequently, DELL stock gained 17% on Friday, its largest single-day gain in three months, and a further 3.4% on Tuesday. (Monday was a U.S. market holiday on account of Memorial Day.)
 

The sharp rally adds to the stock’s strong momentum over the past several months, with Dell shares surging 144% so far this year. Recent gains have also been fueled by expectations that Dell could benefit from the controversy surrounding Super Micro.

In March, U.S. authorities charged one of Super Micro’s co-founders and two others with illegally selling certain Nvidia chips to Chinese customers in violation of export rules. At the time, analysts said the incident could prompt some customers to shift demand toward rival Dell.

Analyst View Ahead Of DELL’s Q1 Report

Crucially, the expectations are high going into Dell’s report. The company’s fiscal first quarter revenue is expected to rise 7% to $35.7 billion, and adjusted profit is expected to rise 91% to $2.96, according to Koyfin. The growth in the bottom line is expected to be the highest since at least 2018, according to the data available from Koyfin.

Currently, 18 of the 27 analysts covering DELL rate the stock ‘Buy’ or higher, seven rate it ‘Hold,’ and two rate it ‘Sell,’ per Koyfin. However, their average price target of 218.09 implies a 29% downside from the stock’s last close.

In its investor note last week, Morgan Stanley said it expects a "very strong" report, driven by strength in AI servers and a pull-forward in large enterprise spending, although much of that is already priced into the stock.

Dell could see AI server demand of $65 billion in fiscal 2027, well above the company's target of $50 billion, the research firm added, while raising its price target to $170 from $110. Several other analysts, including Wells Fargo, Citi, Bank of America and JPMorgan, have also raised their price targets on DELL in recent weeks.

Retail View On DELL

On Stocktwits, the retail sentiment for the stock has climbed since last Friday and was ‘bullish’ on Tuesday. Message volume for the ticker has risen 1,125% in the past month, while watcher count has increased 6.2%.

“$DELL I had to zoom out of the chart to see how extended this is… where is the room to run for earnings??” a trader said, echoing analysts’ view. Another wrote: “One of the nicest 3 mo charts in my portfolio and still rising. Hanging tight for years with this.”

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