Key TakeawaysDell Technologies announces Q2 fiscal results Tuesday after market hours, with Wall Street forecasting EPS between $4.92-$4.95 on approximately $45 billion revenueAI-optimized server and networking revenue estimated at $25.2 billion, representing 95% year-over-year expansionShares have skyrocketed 268% in 2024, currently valued at 21.5x forward earningsCompany secured $24.4 billion in AI-related orders during Q1 and increased its fiscal 2027 AI server revenue target to $60 billionPrimary investor focus centers on potential upward revision to AI server revenue guidance rather than simply meeting estimatesDell Technologies is scheduled to unveil its second-quarter financial results following Tuesday’s closing bell, with market expectations running exceptionally high. According to FactSet’s analyst survey, the consensus calls for adjusted earnings of $4.92 per share alongside revenue reaching $44.9 billion, marking substantial increases from the prior-year period’s $2.32 per share and $29.8 billion.Dell Technologies Inc., DELLZacks Investment Research projects marginally higher figures, targeting EPS of $4.95 with revenue of $45.34 billion—translating to impressive 52% year-over-year expansion. These Street projections edge slightly above Dell’s own quarterly guidance range of $44-$45 billion in revenue and adjusted earnings per share of $4.80, with a variance of plus or minus $0.10.Shares of Dell have exploded 268% since January and presently command a valuation of 21.5 times forward earnings. This multiple significantly exceeds the company’s five-year historical average of 10.9 times forward earnings. The stock currently sits roughly 10% beneath its 52-week peak of $514.The critical metric investors will scrutinize is artificial intelligence server revenue. Wall Street analysts project server and networking storage revenue of $25.2 billion for the quarter, nearly doubling the $12.9 billion recorded in the comparable year-ago period.During the first quarter, Dell delivered $16.1 billion in AI-optimized server revenue, surging 757% year over year. Additionally, the technology giant secured $24.4 billion worth of AI orders in that period and subsequently elevated its fiscal 2027 AI server revenue projection to $60 billion.Wall Street PerspectivesAmit Daryanani, analyst at Evercore ISI, maintains an Outperform rating on Dell with a $550 price objective. In an August 28 research note, he characterized expectations as “high but achievable,” emphasizing that investor discussions have shifted from whether Dell will exceed estimates to the magnitude of potential increases to the company’s AI server revenue targets.Brandon Nispel of KeyBanc Capital Markets adopts a more measured stance. His August 23 analysis highlighted that following multiple quarters of explosive expansion, “deceleration is inevitable,” while noting Dell’s current trading premium relative to historical valuation norms. He assigns the stock a Sector Weight rating without establishing a specific price target.Fiscal 2027 earnings per share projections have climbed nearly 11% during the past three months, advancing from $17.40 to $19.29. Similarly, fiscal 2028 estimates have increased almost 10%, moving from $21.42 to $23.51. Current consensus forecasts Dell achieving 87% EPS growth in fiscal 2027.Artificial Intelligence Infrastructure StrategyDell’s PowerEdge server portfolio represents the cornerstone of its artificial intelligence expansion narrative. The organization has strengthened its collaboration with Nvidia via the Dell AI Factory initiative, introducing new configurations leveraging Nvidia’s Vera Rubin architecture.The company is simultaneously intensifying its partnership with AMD, delivering platforms equipped with AMD Instinct accelerators.Competitive pressures remain substantial. Hewlett Packard Enterprise, Super Micro Computer, and Lenovo are aggressively pursuing AI server opportunities.Super Micro announced fiscal Q4 results exceeding expectations on August 11 with encouraging full-year projections. Cisco similarly delivered strong quarterly performance driven by artificial intelligence hardware demand.Zacks Research currently assigns Dell a Rank 1 (Strong Buy) designation ahead of Tuesday’s earnings announcement.The post Dell (DELL) Q2 Earnings Preview: Can AI Server Momentum Justify Sky-High Valuations? appeared first on Blockonomi.