Dell Technologies Inc. (NYSE:DELL) announced continued headcount reductions and projected a decrease in other businesses' net revenue as it no longer acts as a distributor of VMware's standalone products and services. DELL stock is trading marginally higher on Wednesday.
According to an exchange filing, the company anticipates rising input costs in the second half of fiscal 2025, driven by inflation and the weakness of "end-user demand and supply dynamics."
Despite these challenges and competitive pricing pressures, Dell expects net revenue growth for the year, fueled by increased demand for AI-optimized servers and a modest boost from the PC refresh cycle.
The company remains committed to strategic cost management and business transformation while navigating competitive pricing pressures.
There is a rising crisis about the profitability of the equipment sold by Dell and peers such as Super Micro Computer, Inc. and Hewlett Packard Enterprise Company because the servers need costly computer chips manufactured by companies like NVIDIA Corporation, reported Bloomberg.
Last month, Dell reported second-quarter revenue of $25.03 billion, beating the consensus estimate of $24.14 billion, according to Benzinga Pro. The company reported adjusted earnings of $1.89 per share, beating analyst estimates of $1.71 per share.
Also Read: Dell Q2 Earnings: Revenue Beat, EPS Beat, Accelerating AI Momentum And More
"Our AI momentum accelerated in Q2, and we've seen an increase in the number of enterprise customers buying AI solutions each quarter," said Jeff Clarke, vice chairman and chief operating officer of Dell, in a press release dated August 29.
In June, Dell slashed employment primarily in sales without revealing how many workers would be involved. Dell said in February that it had about 120,000 full-time employees internationally, Bloomberg added.
According to Benzinga Pro, DELL stock has gained over 48% in the past year. Investors can gain exposure to the stock via Innovator Deepwater Frontier Tech ETF (NYSE:LOUP) and Return Stacked Bonds & Managed Futures ETF Roundhill Generative AI & Technology ETF (NYSE:CHAT).
Price Action: DELL shares are trading higher by 0.27% to $106.93 at last check Wednesday.
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