tech

Rani Molla8/29/25

Dell falls after soft Q3 guidance, margin squeeze in AI server business

Dell is down 6% premarket after issuing soft guidance for the third quarter.

The tech hardware company’s second-quarter earnings and revenue figures released after the bell on Thursday, however, did manage to best expectations:

Adjusted earnings per share of $2.32, higher than the $2.29 FactSet consensus estimate.
Revenue of $29.78 billion, compared with analyst estimates of $29.02 billion.

While the company raised its fiscal 2026 full-year revenue guidance to $107 billion at the midpoint and to $9.55 for non-GAAP diluted EPS — higher than analysts had expected — its third-quarter guidance was disappointing. The company anticipates non-GAAP diluted EPS of $2.45 in Q3, lower than the $2.55 consensus estimate on FactSet.

The company’s Infrastructure Solutions Group, which includes AI servers, had revenue of $16.8 billion last quarter, more than the $15.6 billion analysts predicted. The company says it expects to sell $20 billion worth of AI servers this year, double what it did last year.

Profitability in that business unit was on the weaker side, with margins coming in lower than anticipated. Dell COO Jeff Clarke attributed this to “aggressive” and “competitive” deals that caused some one-off expenses.

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Tesla just recalled its beleaguered Cybertruck for the 10th time since the vehicle was introduced two years ago. This time the company recalled about 6,000 of the “apocalypse-proof” vehicles due to what the National Highway Traffic Safety Administration says is an improperly installed “optional off-road light bar accessory” that could become disconnected from the windshield while driving, and could “create a road hazard for following motorists and increase their risk of a collision.”

CEO Elon Musk once said he could sell up to 500,000 of the stainless steel behemoths a year. In the first three quarters of this year, the company has sold only about 16,000.

Microsoft: Forget what we said, we are going to keep spending on capex

Last quarter, the company offered guidance that its capex spending would be lower in the second half of the fiscal year. Yesterday it said spending would go up.

Microsoft Celebrates Its 50th Anniversary With Copilot AI Event

tech

Analysts lower Meta price targets after social media giant says AI capex will keep climbing

Meta may have posted record revenue Wednesday but the stock is deeply in the red in the wake of its third-quarter earnings report, after the social media company said that its capital expenditure on AI would continue to rise.

The earnings prompted a number of analysts to lower their price targets or downgrade the stock.

RBC Capital lowered its price target to $810 from $840. Bank of America Securities lowered its price target to $810 from $900. Barclays, JPMorgan, Deutsche Bank, and Wells Fargo also lowered their price targets on the company.

Earlier today, Benchmark downgraded its rating to a “hold” from a “buy.” Oppenheimer downgraded the company to “perform” from “outperform,” saying the “significant investment in Superintelligence despite unknown revenue opportunity mirrors 2021/2022 Metaverse spending.” Ouch.

Capex marks the spot

Big Tech capex approaches $100 billion and Dan Ives loves it

AI spending shows no signs of flagging.

Meta, Microsoft, Alphabet and Amazon capex

Apples to apples

Apple is becoming more of a services company and less a product company

Apple reports earnings Thursday.

People Walk Past Apple Store Displaying iPhone 17 Pro Poster in Chengdu

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