Dell Faces Challenges Amid Tariff Concerns and Slow Growth

Dell Technologies is experiencing a challenging 2025, marked by a 28% decline in share price. Factors include weak quarterly results and potential tariff upheavals impacting its global supply chain. Investors should weigh the uncertainties before making decisions.

Date: 25-04-2025

AI Rating: 6

Dell Technologies (NYSE: DELL) is facing considerable challenges so far in 2025, with shares down by 28%. This decline is attributed to both disappointing quarterly results and looming tariff concerns that threaten its global supply chain, primarily in light of the ongoing tariff wars led by the Trump administration. The stock's performance could be further impacted by uncertainty surrounding potential tariffs on critical components like semiconductors and computers.

Despite these challenges, there are positive indicators worth mentioning. Dell forecasts an 8% increase in revenue for fiscal 2026, consistent with its previous growth rate. In terms of adjusted earnings, Dell is projecting a robust 14% growth, estimating earnings per share (EPS) of $9.28, which is encouraging even amid a cloudy outlook.

However, it should be noted that analysts have lowered their earnings growth expectations for Dell in the near term, predominantly due to the tariff uncertainties. It is crucial to understand that these estimates could improve should negotiations yield favorable outcomes regarding imports, thus mitigating some of the risks posed by tariffs.

Importantly, Dell is in a strategic position to leverage the AI boom, with expected sales of AI servers set to reach $15 billion in fiscal 2025—a 50% increase year over year. With significant ventures in AI-related projects and a solid backlog, there could be substantial upside potential for the company if it successfully navigates the current turmoil. Nevertheless, the uncertainty tied to tariffs poses a high risk to its immediate revenue growth trajectory.

**Rating Summary:** Given the potential for revenue growth in AI alongside a rather bleak short-term outlook due to tariffs, investors might maintain a cautious approach: 6 for revenue growth, 7 for EPS expectations, with an overall sentiment reflecting both challenges and opportunities. The overall rating for Dell Technologies, considering its present risks and growth prospects, is 6.

Stocks: DELL ASML