Investing.com -- Dell Technologies shares fell sharply after the company guided fourth-quarter revenue below Wall Street expectations amid weaker demand for its traditional PCs and competition from peers.
Dell Technologies Inc (NYSE:DELL) was down more than 11% in after-hours trading following the report.
For the third quarter, the AI server maker reported adjusted earnings per share (EPS) of $2.15 on revenue of $24.4 billion, compared with estimates for $2.06 per share and $24.69B, respectively.
Revenue was hurt by a performance in the company’s client solutions group, which includes PCs and laptops, saw revenue fall 1% to $12.1B year-on-year in Q3.
The infrastructure solutions group saw revenue jumped 34% YoY in Q3, driven by strong AI-related demand.
Consumer revenue fell down 18% to $2B.
Looking ahead to the fourth quarter, Dell forecast revenue between $24 billion and $25 billion, missing the average analyst projection of $25.57 billion, according to LSEG data.
Commenting on the report, Deutsche Bank (ETR:DBKGn) analysts believe Dell's weaker Q4 guide comes mainly due to delays in AI server sales and PC refresh activity.
"To be clear, we believe these headwinds are generally more deferrals/delays than anything else (ie: not lost revenue), that should theoretically enhance the set up for DELL entering FY26E," analysts said.
"That said, near-term estimates are likely to trend lower post print, and hence we expect a negative reaction in shares, given the strength seen year to date," they added.
However, analysts at Morgan Stanley (NYSE:MS) described the investor reaction as "overdone," adding they "would be buyers post-earnings."
Yasin Ebrahim contributed to this report.