💻 Can Dell Continue To Grow Unabated?

Robinhood tanks; Zoom's tepid forecast.

Hey Global Investor! Here’s what you need to know before the US markets open.

Market Snapshot 📈

S&P 500 (Monday’s Close) 4,528.79 +19.42 (0.43%)

NASDAQ (Monday’s Close) 15,265.89 +136.39 (1.23%)

FTSE 100 (4:30 PM IST) 7,103.56 -44.45 (0.62%)

NIFTY 50 (Today’s Close) 17,132.20 +201.15 (1.19%)

USDINR (Today’s Close) 72.96 (1 Year -2.91%)

🔥 Top Movers

AFRM +46.67%
IHC +18.78%
DSPG +17.85%

ADTN -16.52%
DSGN -13.09%
INTA -10.01%

💻​ Dell: Growth Unabated?

Dell Technologies (DELL) delivered a record-breaking quarter for the second time this year. The incessant demand for computers and cloud services meant both revenue and EPS handily beat analyst expectations. But there seems to be moderation in the offing, and that’s where the challenge lies. (Tweet This)

Breakneck Growth

Dell’s second-quarter results comfortably exceeded analyst estimates as the shift to a hybrid work environment kept demand strong.

Key Stats From Q2:

  • Revenue: $26.12B Vs $25.53B expected
  • EPS: $2.24 Vs $2.03 expected

Dell’s Client Solutions Group (CSG), home to the company’s hardware devices, recorded revenue growth of 27% Y-o-Y to a record $14.3B. This, despite the industry grappling with supply-chain woes and shortage of crucial components.

The company continues to be bullish for the current quarter and expects revenue growth in the high-teens Y-o-Y. CSG business is expected to continue outperforming.

Be that as it may, both Dell and its competitor Hewlett-Packard (HPQ) have started ringing alarm bells about the critical component shortage. Dell acknowledged that the demand was “way ahead” of supply while still managing to ship a record number of PCs and monitors during the current quarter.

Dell has also launched the high-performance Alienware X-series laptops for gaming, and these come with exclusive Cryo-Tech innovations. Despite these developments, Dell remains behind with a market share of 17.1%, while Lenovo leads with a 24% market share, followed by HP’s 20%.


Back in the fall of 2016, Dell had acquired EMC, including its subsidiary VMWare for $67B. This cloud-computing unit of Dell also reported its quarterly results, which were marginally ahead of estimates.

Key Stats For Q2:

  • Revenue: $3.14B Vs $3.1B expected
  • EPS: $1.75 Vs $1.64 expected

VMWare’s (VMW) SaaS business grew 23% Y-o-Y to $776M and contributed to almost a quarter of VMWare’s revenue. This subsidiary provided a sheepish single-digit growth projection for fiscal 2022.

Dell, which owns an 81% stake in VMWare, is looking to spin it off as an independent entity later this year. It has been waiting for the five-year mark to pass so that the transaction becomes tax-free.

VMWare expects to have increased strategic, financial, and operational flexibility to drive its growth while continuing its partnership with Dell as a standalone company. VMWare also does not expect significant balance sheet changes after spinning off.

For now, Dell has a few things to maneuver around: the impending component shortage; the pressure to sustain the growth momentum in the face of the shortage; push forward with the VMWare spin-off in the hope that the sum of the parts is greater than the whole; and at some point, grab market share and get ahead of incumbents Lenovo and HP.

It seems like at least one of these is easier said than done.

Market Reaction
DELL ended at $98.15, up 1.24%.

Company Snapshot 📈

DELL $98.15 +1.20 (1.24%)

Analyst Ratings (21 Analysts) BUY 62%  HOLD 33%  SELL 5%

Newsworthy 📰

Bad News: Robinhood tanks after SEC Chair tells Barron’s that banning payment for order flow is a possibility (HOOD -6.89%)

Mixed Bag: Zoom’s tepid growth forecast takes shine off billion-dollar quarter (ZM -12.22%)

Error: Coinbase says it sent erroneous account security notifications to 125K customers (COIN -1.36%)

Later Today 🕒

  • CrowdStrike Holdings Inc. Earnings (CRWD)
  • H&R Block Inc. Earnings (HRB)
  • Ambarella Inc. Earnings (AMBA)
  • American Woodmark Corporation Earnings (AMWD)
  • 7:30 PM IST: Consumer Confidence Index

Fun Fact of The Day 🌞

When Scott Paper Company first started manufacturing toilet paper, they did not put their name on the product because of embarrassment

Disclaimer: The content of this article has been created and published by Winvesta India Technologies Pvt. Ltd., in order to ease the reader’s understanding of the subject matter. The information and/or content (collectively “Information”) provided herein is general information sourced through various news reports and does not constitute a research report or a research analysis. The Information is not intended to offer advice, target or solicit any particular customer or group of customers to buy or sell securities. 

Winvesta does not render any research or advisory services and provides a more detailed description of its services on its website and mobile application along with the terms and conditions published therein from time to time. While reasonable care has been exercised to ensure that the Information is adequate and reliable, no representation is made by Winvesta as to its accuracy or completeness and Winvesta, its affiliates, subsidiaries and employees accept no liability of whatsoever nature for any direct or consequential loss, including without limitation any loss of profits, arising from reliance on this Information. Neither Winvesta nor any of its affiliates are acting as an investment adviser, research analyst or in any other fiduciary capacity. Accordingly, reader’s are expected to undertake their own due diligence in consultation with their own advisors and are advised not to solely rely on the Information. Any such reliance shall be at the reader’s own risk. 

All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. There is always the potential of losing money when you invest in securities, or other financial products. Investors should consider their investment objectives and risks carefully before investing.

Start Building Your Global Portfolio Today

Download Winvesta App now to Get Started