By Denny Jacob

Dell Technologies shares declined after investors reacted to its outlook for the current quarter that reflected headwinds such as a softer near-term backdrop for personal computers.

Shares were trading about 5.9% lower, at $101.52, Friday morning. The stock is down around 19% over the last year.

The PC maker on Thursday forecast first-quarter adjusted earnings per share to come in at $1.65. Wall Street expected $1.69 a share in adjusted earnings, but analysts aren't very concerned.

UBS's David Vogt said the outlook reflected the softer near-term PC backdrop and headwinds from a well telegraphed graphics-processing-unit, or GPU, transition. "While the shares could trade on the F1Q EPS guide . . . we believe any weakness should be bought as the company's initial guide has historically been conservative," adds Vogt.

Analysts at Melius Research share a similar sentiment. They note that the Round Rock, Texas, company is executing well in spite of prospects for tariffs and upcoming surge in lower margin artificial-intelligence servers.

"Although Dell's outlook only includes the first 10% tariff on China (not the next 10%), we believe the company will adjust prices and manufacturing to mitigate the impacts at least partially," said the analysts at Melius. "We have PCs improving . . . but not getting out over our skis given higher prices could hit sales."

Write to Denny Jacob at denny.jacob@wsj.com

(END) Dow Jones Newswires

February 28, 2025 11:26 ET (16:26 GMT)

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