Major Bank Rating | Goldman Sachs: Dell Technologies' Q1 Earnings Exceed Expectations, AI Servers Become Growth Spotlight, Target Price $230

Glonhui June 1｜Goldman Sachs released a report stating that Dell Technologies’ first quarter earnings per share were $4.86, far surpassing both the bank's and market expectations of $2.96, and exceeding guidance in the range of $2.8 to $3. The better-than-expected results were mainly due to the Infrastructure Solutions Group (ISG) revenue rising 181% year-on-year (guidance was for over 100% growth) and the Customer Solutions Group (CSG) revenue rising 17% year-on-year (guidance was for about 2% growth). Notably, CSG’s profit margin was exceptionally strong at 8%, enough to offset the relatively weaker ISG profit margin (10.5%) that may be affected by the AI server portfolio. The report highlights the momentum of AI servers as a major bright spot, with first quarter orders reaching $24 billion (compared to $34 billion in Q4 FY2026), and raises the FY2027 AI server revenue outlook to $60 billion (previously $50 billion). Dell has raised its FY2027 outlook, projecting revenue to increase by $27 billion (including an additional $10 billion in AI server sales) to $165–169 billion (previously $138–142 billion), and the median earnings per share up by $5 to $17.9 (previously the median was $12.9). Goldman Sachs gives Dell a “Buy” rating with a target price of $230.