Dell’s first quarter results were shaped by strong demand for AI-optimized servers and growth across its core infrastructure and PC businesses. Management attributed revenue gains to robust enterprise and cloud service provider (CSP) orders, particularly for next-generation AI servers, and highlighted a sequential increase in large-scale deals. However, despite these topline gains, the market responded negatively as margin pressures in the PC segment and lower-than-expected non-GAAP earnings per share weighed on investor sentiment. CFO Yvonne McGill noted that “the demand environment remained soft” in the consumer PC market and described a more competitive pricing landscape, impacting overall profitability.

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While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions Dell’s Q1 Earnings Call

• Amit Daryanani (Evercore ISI) asked how to size the full-year AI server revenue opportunity and whether the strong Q1 orders reflect sustainable demand. CEO Jeff Clarke explained that the pipeline and backlog are robust but stressed that deployments are complex and will materialize unevenly throughout the year.
• Ben Reitzes (Melius Research) pressed for clarity on second-half growth, questioning if guidance implied a sharp slowdown in AI server shipments. Clarke and CFO Yvonne McGill replied that their outlook remains cautious due to the unpredictable timing of large deployments but reiterated confidence in surpassing $15 billion in AI server revenue.
• Erik Woodring (Morgan Stanley) inquired about the potential for higher-margin storage and services to attach to AI server sales. Clarke noted modest improvements to date and described storage and networking attach rates as ongoing areas of opportunity, particularly given the shift toward disaggregated architectures.
• Wamsi Mohan (Bank of America) asked how tariffs and competitive pricing are impacting gross margins, specifically on AI servers. Clarke confirmed that guidance incorporates known tariff impacts and said that the company did not raise prices, with current margin outlook reflecting both AI server profitability and broader market pressures.
• Samik Chatterjee (JPMorgan) questioned whether recent demand trends reflect customer pull-forward or macro caution. Clarke acknowledged some pull-forward behavior but emphasized that traditional server and storage growth has moderated, especially in North America, reflecting both market dynamics and customer spending patterns.

Catalysts in Upcoming Quarters

In future quarters, the StockStory team will be monitoring (1) the pace at which Dell converts its AI server backlog into revenue and the timing of major customer deployments, (2) margin trends across core segments, particularly as competitive pricing and large deal activity persist, and (3) the progression of storage and services attach rates to AI infrastructure sales. Execution against these milestones will indicate whether Dell can sustain growth and improve profitability amid evolving IT spending patterns.

Dell currently trades at $126.31, up from $113.57 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).

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