Dell rides the AI wave on Q2 beat

Published: Aug 29, 2024 Duration: 00:04:36 Category: News & Politics

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IMPROVING, NUMBERS ARE GOING HIGHER. THEY'RE ONLY GOING TO SEE A RECOVERY INTO '25 AND '26. >>> I WANT TO SWITCH GEARS, CHECK OUT SHARES OF DELL RIGHT NOW. SHARES ARE MOVING HIGHER AFTER BEATING ESTIMATES AS ITS SERVER SALES SOAR BY 80%. INVESTMENT COMMITTEE MEMBER BILL BARUCH OWNS IT AND JOINS US ON THE PHONE. BILL, OVER TO YOU. >> THIS WAS A GREAT REPORT. IT'S EVERYTHING WE NEEDED TO SEE. YOU GOT THE DOUBLE BEAT, THE FORECAST GRADE, MOST IMPORTANTLY THERE WERE SOME CONCERNS ABOUT MARGINS. YOU GO BACK TO THE PRIOR REPORT AND THERE WAS SOME SIGNIFICANT MARGIN IMPROVEMENT HERE IN THE ISG SEGMENT, THE INFRASTRUCTURE SOLUTIONS GROUP WHICH THEN HOLDS THE A.I. SERVER SEGMENT. THIS EASED SOME CONCERNS. THAT A.I. SERVER SUBSEGMENT, 82% QUARTER OVER QUARTER GROWTH. BUT ON TOP OF THAT THE BALANCE SHEET, IT'S IN THE BEST PLACE IT'S BEEN IN SOME TIME AND THEY'RE IN A GOOD POSITION TO RETURN CAPITAL SHAREHOLDERS. WE REALLY LIKE WHAT WE SEE HERE. THIS IS WHAT I'VE BEEN LOOKING TO SEE TO ADD TO THE NAME. 123 AND THEN WE COULD SEE 134 DOWN THE ROAD HERE MAYBE BEFORE THE END OF THE YEAR. >> YOU HAVE A FULL HELD OF STEAM ON THIS ONE. YOU MENTIONED GUIDANCE. YOU'RE TALKING FULL-YEAR GUIDANCE. I'M LOOKING AT THE EPS GUIDANCE, $2 PLUS OR MINUS 10 CENTS. IS THAT A CONCERN THEIR GUIDANCE IS WELL BELOW ESTIMATES FOR THE CURRENT QUARTER? >> I DON'T SEE THAT AS BEING A LARGE CONCERN MOSTLY BECAUSE THE MARGIN IMPROVEMENT WAS THE BIGGEST CONCERN. WHAT THIS ULTIMATELY DOES, TOO, I THINK AS A BIGGER NARRATIVE, IT BODES WELL FOR THE OVERALL HEALTH OF THE A.I. ECOSYSTEM, WHICH ALSO, YOU KNOW, SIGNALS A POSITIVE SIGN FOR A LOT OF THE HOLDINGS THAT WE CURRENTLY HAVE. YOU TALK ABOUT MARVELL. YOU TALKED ABOUT BROADCOM. THERE'S A LOT OF NAMES IN HERE THAT CAN REALLY KIND OF FEED OFF OF THE POSITIVE MOVE AND THE POSITIVE REPORT THAT WE'RE SEEING HERE ESPECIALLY WITHIN THAT MARGIN IMPROVEMENT. I'M VERY ENCOURAGED BY THIS. >> VERY ENCOURAGED BY THIS. WHAT ABOUT PC SALES? THEY'RE FORECASTING A REBOUND WHEN IT COMES TO PC SALES. A LOT OF PEOPLE FORECASTING THAT FOR A QUARTER QUARTERS, THE A.I.PCs WILL REINVIGORATE THAT PART OF THE BUSINESS. >> I DO LIKE THAT. OVERALL, WE SEE GOING BACK TO LAST YEAR THE BOTTOMING OUT OF THE MEMORY SEGMENT, WE'VE SEEN GOOD, POSITIVE MOMENTUM COMING OUT OF THAT. NOW AS YOU GET THE UPDATE CYCLE WITH A.I.-INFUSED PCs, I THINK THAT'S A GOOD TAIL WIND HEADING INTO 2025, AND I EXPECT THAT ALSO TO HELP CARRY THE STOCK AND CARY THE NAME FROM REVENUES AS WELL AS MOMENTUM FROM A NARRATIVE STANDPOINT IN THROUGH 2025. >> STILL A WAIT AND SEE BUT SHARES OF DELL UP JUST ABOUT 5% RIGHT NOW. BILL, STICK WITH US. WE'RE ALSO WATCHING INTEL. SHARES ARE HIGHER IN REPORTS. THE COMPANY IS EVALUATING STRATEGIC OPTIONS. OUR SEEMA MOODY IS HERE. SHARES ARE UP OVER 8%. >> A BIG MOVER NOT JUST TODAY BUT YESTERDAY AS WELL ON THIS REPORT THAT INTEL EXECUTIVES ARE LOOKING AT STRATEGIC OPTIONS THAT COULD POTENTIALLY INCLUDE SPLITTING OUT CERTAIN PARTS OF THE BUSINESS, FOUNDRIES SPECIFICALLY. THAT HAS HELPED SHARES OUTPERFORM AND SOMETHING WALL STREET IS WATCHING CLOSELY. ADVISERS HAVE BEEN, INCLUDING BANKERS FOR MORGAN STANLEY, WORKING WITH INTEL ON LOOKING AT STRATEGIC OPTIONS WHICH LOOKING AT THE VALUE SPECIFICALLY AROUND FOUNDRIES IS WHAT THEY'VE BEEN DEBATING AND SOMETHING THAT IS ALLOWING THE STOCK TO OUTPERFORM HERE BECAUSE GIVEN THE EARNINGS REPORT EARLIER THIS SUMMER WHERE THE COMPANY ANNOUNCED THAT $10 BILLION COST CUTTING PLAN, THERE'S BEEN REAL CONCERNS ABOUT THE HEALTH OF THE BUSINESS, THE CEO PAT GELSINGER'S OVERALL TURNAROUND PLAN. >> BILL, YOU ARE AN INTEL SHAREHOLDER. YOUR VIEWS ON THE ANNOUNCEMENT, INTEL TRYING TO GET AHEAD OF ACTIVIST INVESTORS, LAYING OFF PEOPLE. YOUR VIEWS ON THE STOCK AND THE ABOUT IS? >> UNFORTUNATELY, WE ARE NOT AN INTEL SHAREHOLDER. WE DID DUMP THIS NAME. IT WAS IN THE BOTTOM OF OUR HOLDINGS. EVEN TODAY UP 8%, IT'S TRADING WHERE IT OPENED THAT DAY AFTER THAT REPORT. I THINK THIS IS A VERY COST-INTENSIVE BUSINESS, AND THEY HAVEN'T REALLY BEGUN TO SEE THE REWARD COMING FROM GOVERNMENT SUBSIDIES. SO I THINK RIGHT NOW BY SPLITTING THIS BUSINESS UP, YEAH, THERE'S GOING TO BE A TAIL WIND OF SORT OF THE POSITIVE SHAKE-UP. AGAIN, THIS IS A VERY, VERY TOUGH BUSINESS TO BE RUNNING RIGHT NOW. I'M NOT SURE THAT YOU HAVE ENOUGH LEADERSHIP THAT IS TAKING EACH SEGMENT INTO THE PLACE THAT IT NEEDS TO BE. SO, AGAIN, WE'RE NOT A SHAREHOLDER RIGHT NOW. I DO LIKE TO SEE THE

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