2024-06-04 06:43:03 ET
Summary
- Dell's position in the AI server market is still a key reason for optimism about the company's future.
- Their "land and expand" strategy allows Dell to form long-term relationships and generate ongoing revenue streams.
- Despite concerns over AI server profitability, Dell's Q1 revenue beat expectations and the Infrastructure Solutions Group saw a 22% increase in revenue.
Investment Thesis
Despite the negative market reaction to Dell’s ( DELL ) FY Q1 2025 results, I remain optimistic about the company's future. The main reason behind my optimism, as highlighted in the earnings call, is their position in the AI server market. I actually believe the call was generally positive despite analyst Toni Sacconaghi's comments regarding the profitability and operating margins of AI servers, which I will get into later in this article....
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Dell Q1: Low AI Server Profits Are Good