Hardware and infrastructure solutions provider Dell Technologies (NASDAQ: DELL ) is a diversified technology company comprised of two primary segments: Infrastructure and Client Solutions. The segment that manufactures and sells personal computers, monitors, accessories, and gaming hardware is the Client Solutions segment. The acquisition of storage solutions provider EMC more than a decade ago helped shape the storage and networking solutions segment, the Infrastructure Solutions Group. While revenue in the Client Solutions Group (CSG) declined due to pandemic-driven revenue normalization in 2021, revenue in its Infrastructure Solutions Group (ISG) continued to hit record highs. The company also owns Alienware gaming systems, SecureWorks network security and cloud computing management software company Virtustream. Dell also divested its 81% stake in virtualization company VMWare (NASDAQ: VMW ). The company has continued to gain commercial PC market share in 35 of the past 39 quarters and has been able to reduce quarterly operating expenses by more than $300 million since the first quarter of 2022. Despite the 500 basis point impact of a strong dollar, Dell easily beat its Q3 2022 EPS estimate and, like rival Hewlett-Packard (NYSE: HPQ ), may indicate a normalization process in PC sales May have bottomed out.
MarketBeat.com – MarketBeat Big Popular Support APEX as a Service Solution Model 
Pandemic It’s also a positive for Dell’s infrastructure business, with capex spending on infrastructure due to the unpredictability of the COVID pandemic and budgetary constraints from lockdowns. This has led more companies to consider service subscription plans (ie: software as a service, storage as a service, hardware as a service, etc.) to reduce costs in the face of uncertainty while gaining more flexibility, value, and capabilities. For Dell and other as-a-service (aaS) providers, that means steady, predictable and consistent cash flow. Dell’s APEX allows companies to procure hardware, storage, software, security and cloud in a single offering with complete end-to-end maintenance and management, making it scalable and affordable, and under its hybrid subscription and consumption billing plans No overage charges will be incurred. This is especially true for companies that employ an increasingly remote workforce, and fits into the “new normal” of hybrid working and flexible offices.
Strong beats but still…
On November 21, 2022, Dell released Fiscal 2022 results for the third quarter ending October 2022. The company reported earnings per share (EPS) of $2.30 excluding non-recurring items, beating analysts’ consensus estimate of $1.61, beating $0.69 per share. Revenue fell (-6.4%) YoY to $24.72 billion, beating analysts’ consensus estimate of $24.61 billion. It’s tough to compare to 2021, which was a bumper year for the customer service sector as consumer PC and hardware sales hit record highs, driven by the pandemic. Dell COO Jeff Clarke commented: “Taking a step back, the near-term market remains challenging and uncertain. On the one hand, we’ve seen some customers delay IT purchases. As demand continues to drive near-term productivity, other customers continue to march with Dell. The world continues to undergo digital transformation, data continues to grow exponentially, and customers continue to seek technology to drive their businesses forward no matter what the economic environment.” 2022 On Nov. 16, Dell also announced a $1 billion settlement in a class-action lawsuit that brought it back as a public company. Its insurers may pay part of the settlement, which still needs final approval from a Delaware Chancery Judge.
DELL Weekly Cup and Handle Pattern
The weekly candlestick chart shows a triangle breakdown in August 2022, setting the stage for a break below $45 That base level lowered the stock to a swing low of $32.90. Shares successfully rallied after forming a rounding bottom, resulting in a weekly market structure low (MSL) above the $36.98 trigger, driven by a weekly stochastic bounce across the 20-band. Shares moved higher above weekly 20-period exponential moving average (EMA) resistance, which has now become support at $41.22, as shares headed toward weekly 50-period EMA resistance at $47.01. The rally resulted in a potential weekly cup and handle pattern after shares peaked in the fringe region between $45.40 and $46.73, which was also the triangle apex and breakdown level earlier. A minor pullback towards the low $40s and a break above the weekly 50-period moving average would trigger the pattern. Since the weekly stochastic is only in the 50 band, a move higher is possible. Retracement supports are found at the weekly MSL triggers of $41.18, $39.90, $38.32, $36.98, weekly swing lows of $34.80 and $32.90.
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