Dell Technologies Sees Potential Loss of PC Market Share in Q2: UBS

Dell Technologies likely lost PC market share in Q2, according to UBS. The news caused Dell's stock to plummet 10%. As the world's leading PC manufacturer, Dell's business is organized around five families of products and services, including laptops, PCs, software and peripherals, corporate equipment, and services. Net sales are primarily driven by product sales (72.8%), with services accounting for 27.2%. Exports comprise 50.3% of net sales.

Dell Technologies (DELL) reported its fiscal second quarter (Q2) 2026 earnings, revealing a mixed performance that led to a significant drop in its stock price. Despite beating expectations on revenue and earnings per share (EPS), the company's guidance for the third quarter and the full year fell short of analyst estimates, causing Dell stock to plummet more than 5% in extended trading [1].

Key Financial Highlights:
- Revenue: $29.78 billion, up 19% year-over-year (YoY), beating the LSEG consensus estimate of $29.17 billion [1].
- EPS: $2.32, adjusted, versus the estimated $2.30 [1].
- Third-quarter EPS guidance: $2.45, below the LSEG estimate of $2.55 [1].
- Full-year revenue guidance: $107 billion, at the midpoint, versus the Wall Street estimate of $104.6 billion [1].
- Full-year EPS guidance: $9.55, at the midpoint, versus the Wall Street estimate of $9.38 [1].

Segment Performance:
- Servers and Networking: Revenue of $12.9 billion, up 69% YoY, driven by strong demand for AI servers [1].
- Infrastructure Solutions Group (ISG): Revenue of $16.8 billion, up 44% YoY [1].
- Client Solutions Group (PC business): Revenue of $12.5 billion, up 1% YoY, with commercial revenue up 2% and consumer revenue down 7% [1].
- AI servers: Dell shipped $10 billion in AI servers in the first half of FY26 and expects to ship $20 billion in FY26 [1].
- Storage: Revenue declined 3% to $3.86 billion, missing the StreetAccount estimate of $4.1 billion [1].

Market Impact:
The mixed guidance and underperformance in the PC business, which is Dell's largest group, led to a significant sell-off in Dell's stock. Despite the strong demand for AI servers and solutions, the company's PC market share is expected to have declined in Q2, according to UBS [2]. This decline, along with the stock market's reaction to the earnings report, resulted in Dell stock falling more than 10% from its intraday high [2].

Outlook:
Dell expects to see improved performance in the second half of the year, with seasonal trends lifting its storage business and helping margin. The company's COO, Jeff Clarke, noted that the PC refresh opportunity is being seized by improving execution and expanding the PC Total Addressable Market (TAM) [2].

References:
[1] https://www.cnbc.com/2025/08/28/dell-earnings-report-q2-2026.html
[2] https://www.constellationr.com/blog-news/insights/dell-technologies-delivers-strong-q2-ai-system-demand-surges