Dell Stock Slides as Weak Margins Overshadow Strong Forecast

Dell Technologies’ stock experienced a nearly 6% decline in premarket trading on August 29, 2025, despite raising its full-year revenue and earnings forecasts. Dell reported a second-quarter adjusted gross margin of 18.7%, below analysts’ expected 19.6%. Its third-quarter adjusted earnings forecast of $2.45 per share also missed the expected $2.55. Even with the positive forecast, these results sparked worries among investors. Dell said the drop in margins was due to focusing on AI server orders, higher production costs, and competitive pricing to win major contracts. While the company projects third-quarter revenue between $26.5 billion and $27.5 billion, exceeding market estimates, the weaker margins have raised questions about its profitability in the competitive AI server market.