Computer hardware and IT solutions provider Dell Technologies (DELL) is scheduled to announce its results for the third quarter of Fiscal 2026 after the market closes on Tuesday, November 25. Ahead of the Q3 earnings, Aletheia Capital analyst Angus Lin downgraded DELL stock to Hold from Buy and removed the price target due to margin pressures and the growing risks related to Nvidia’s (NVDA) AVAP initiatives.
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Wall Street expects Dell to report earnings per share of $2.47 for Q3 FY26, reflecting a 16% year-over-year growth. Revenue is expected to rise 11.3% to $27.13 billion.
Aletheia Analyst Moves to the Sidelines on DELL Stock
Lin mentioned margin pressures from higher memory costs and “rising risks from Nvidia’s L6–L10 AVAP initiatives, which may reduce Dell’s system-level customization value add” as the reasons for his decision to downgrade the rating for DELL stock.
The analyst lowered his Fiscal 2026 and 2027 gross profit margin estimates by 1 to 2 points to reflect margin pressures in the Client Solutions Group (CSG) and storage servers. Lin also sees downside risk to the Street’s consensus Fiscal 2027 AI server estimates. His model assumes $36 billion in AI server revenue, including only 5,000-plus GB racks, compared to the consensus estimate of $50 billion in revenue and expectations of 10,000 to 12,000 racks. Overall, Lin lowered his Fiscal 2026 and 2027 EPS estimates by 1% and 12%, respectively, which are 3% and 11% below the Street’s forecasts.
Meanwhile, Lin expects Dell to report in-line Q3 FY26 results and modest fiscal fourth-quarter guidance.
Is DELL a Good Stock to Buy?
Heading into earnings, Wall Street has a Moderate Buy consensus rating on Dell Technologies stock based on 12 Buys, four Holds, and one Sell recommendation. The average DELL stock price target of $167.14 indicates 31.4% upside potential from current levels.
