Dell Technologies' stock is down despite solid results reported in revenue and earnings. The report showed that consumers and companies are still buying personal computers even with the lockdowns ease in many parts of the world.
Dell increased its sales 12% in the first fiscal quarter, which is above what analyst expected. Regardless of the positive numbers, some investors believe that the PC growth is reaching its highest level and will not continue to advance furthermore. Many students and people who are working-remotely were in demand for a laptop during the Pandemic but that is now easing over.
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CEO Michael Dell is trying to reduce the dependence on one time hardware sales and redirect the efforts towards a subscription based computer service, something that many companies have proven to be very valuable. Although the PC sales generate about 50% of the company's revenue which add to $3.5 billion in the quarter, server and networking sales rose 9% to $4.1 billion from a year earlier. Storage hardware revenue was $3.8 billion. Services revenue rose 10% in the quarter to $6.45 billion. In conclusion, everything is on the up, but can they keep it up?
In other news, sales from VMware Inc., which is majority-owned by Dell, were $3 billion, up 9%. In April, Dell said it will spin off its stake in VMware, creating two publicly traded companies and raising cash to pay down debt.
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