What happened
When your top rival lowers its full-year outlook, investors take notice if you subsequently raise your own. That's what's happening for computing company Dell Technologies (DELL -2.20%) today. Its financial results for its fiscal second quarter of 2024 far outpaced expectations, which led management to raise its guidance for the remainder of fiscal 2024. Consequently, Dell stock is up a whopping 23% as of 10:30 a.m. ET, reaching new all-time highs.
So what
Rival HP set the tone for this earnings report: HP stock fell earlier this week when it reported disappointing numbers for its fiscal third quarter of 2023 and lowered its full-year guidance.
To be fair, Dell's Q2 revenue of $22.9 billion was down 13% year over year, more than HP's 10% drop in its Q3. But investors believe Dell's business has better momentum right now.
For Q2, Wall Street had expected Dell to report revenue of less than $21 billion, so this was a big beat. Moreover, management's commentary was exactly what investors want to hear right now. In its prepared remarks, management mentioned artificial intelligence (AI) 18 times, calling it a "strong tailwind."
Now what
Dell's management raised its full-year revenue guidance to between $89.5 billion and $91.5 billion, but this still represents a 12% drop from fiscal 2023. However, management does expect its earnings per share to bounce back -- they were challenged last year.
For the year, Dell hopes to earn roughly $6.30 per share. That's way higher than the $3.24 per share it earned in fiscal 2023 and modestly higher than the $6.26 per share it earned in fiscal 2022.
In short, Dell's business is rebounding after a challenging fiscal 2023. And with AI driving its potential, Wall Street is getting excited about this stock.
