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Dell Technologies sections have fallen 7% on mixed profit and profit margin.
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Investors are worried about Dell’s lower margins from the server, which include expensive AI GPUs from Nvidia.
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The focus of the investor begins to change from the growth of revenue on the profit margin, influencing the AI shares.
Move: Dell technologies On Friday, it fell 7% to $ 100.54. The shares fell about 45% of a record maximum of reach in May last year.
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Why: Dell reported about mixed earnings after the market closure on Thursday.
While the company increased its dividend, it increased the share of shares for $ 10 billion and offered solid guidelines for its upcoming fiscal year, this was not enough to invest investor.
Investors are hung on Dell’s gross profit margins, which should be reduced by a lower point, mainly due to the high costs of the GPU Nvidia Blackwell, which are built into its server.
During the call for the company’s earnings, analysts on Wall Street were knocked down by the DELL managerial team with questions about his profit margin, and Dell replied that they had the opportunity to pair their Blackwell server with a lower margin with a tall margin like a warehouse.
Also, dell investors are tariffs from Trump’s administration, which would adversely affect the company.
What does that mean: As the AI flourishing cycle matures, investors divert their focus from top -quality revenue growth and to the bottom of the profit.
This was the case for Nvidia on Thursday, which sold 8% Even after the earning report showed an impressive 78%revenue growth. Instead, investors became involved in the fall of gross profit margins caused by work in the production of GPU next General Blackwell.
For Dell, solid guidelines of revenue and higher than expected products of $ 9 billion for his AI servers were not enough to surpass investors’ concerns due to the fall of a profit margin.
Read the original article about Business Insider
