Dell and Palo Alto Earnings: What to Watch Sept 1

Two of the year’s most crowded tech trades report on the same evening. After the closing bell on Tuesday, September 1, 2026, both Dell Technologies (NYSE: DELL) and Palo Alto Networks (NASDAQ: PANW) release quarterly results, giving investors a same-night read on two very different bets: AI infrastructure hardware on one side, and cybersecurity platforms on the other. Both stocks have roughly doubled or more year to date, which sets a high bar — strong numbers may already be priced in, and any wobble in guidance could be punished.

Here is what the Street expects, and what will actually move the stocks.

Dell: the AI server story faces a tough comparison

Analysts are modeling Dell earnings of about $4.88 per share on revenue of roughly $44.67 billion, up sharply from $2.32 on $29.78 billion in the year-ago quarter. That implied growth — revenue up about 50% year over year — reflects the surge in demand for AI-optimized servers, the systems built around accelerators that hyperscalers and enterprises are buying to stand up AI capacity. The options market is pricing an implied post-earnings move of roughly 9.8%, a signal that traders expect a large reaction in either direction.

The setup is unusual because Dell has been beating its own numbers by wide margins. The company has topped estimates for four consecutive quarters, and the most recent print was an outlier even by that standard: reported EPS of about $4.86 against a consensus near $2.96 — a surprise of roughly 64% — on revenue of about $43.8 billion versus the $35.8 billion analysts had penciled in. Beats that large distort expectations, because they make it hard to know whether the “consensus” number still reflects reality or lags a business that is compounding faster than the models tracking it.

The number that matters most is not the headline EPS but the AI server backlog and the margin on that hardware. AI-optimized servers carry lower margins than Dell’s traditional enterprise gear, so a revenue mix tilting harder toward AI can grow the top line while pressuring profitability. Investors will parse the size of the order pipeline, how fast Dell is converting backlog into shipped revenue, and whether component costs — memory in particular, which has been climbing — are squeezing margins. Dell’s read-through also matters for the broader supply chain, because the company is one of the largest channels through which accelerator demand reaches the market.

Palo Alto: revenue up, but the profit line is the question

Palo Alto Networks presents a different shape. Consensus calls for about $0.88 in earnings per share on revenue of roughly $3.35 billion, versus $0.95 on $2.54 billion a year earlier. That combination — revenue up around 32% while EPS ticks down — is the crux of the print: Palo Alto is growing the business quickly while spending heavily to consolidate the security market around its platform, and the market wants to see whether that investment is still paying off in the metrics that matter. The implied move sits near 8.7%.

The strategy Palo Alto has pursued is platformization — pushing customers to adopt its full suite of network, cloud and security-operations products rather than buying point tools from a dozen vendors. The bet is that bundling drives larger, stickier contracts and expands the recurring revenue base over time, even if it pressures near-term margins and headline pricing. The figures investors will hunt for are the ones that reveal whether that flywheel is spinning: next-generation security annual recurring revenue, the count of large platform deals, remaining performance obligations, and net retention among existing customers.

Cybersecurity has been one of the market’s favored themes all year, riding both persistent breach activity and the argument that AI raises the stakes on both offense and defense. That enthusiasm has already lifted the group, as the AI-driven cybersecurity stock rally earlier this year showed — which cuts both ways for Palo Alto. A crowded, richly valued sector rewards confirmation and punishes any hint that growth is decelerating.

One more line to watch is guidance, which for both companies may matter more than the quarter just reported. Palo Alto’s forward outlook on next-generation security ARR and billings will tell investors whether the platform strategy is still compounding into the next fiscal year, and management’s tone on AI-driven security products — the automation and agentic-defense features the whole sector is racing to ship — will color how the market prices the growth runway. A guide that merely meets expectations can still sink a stock that has doubled; the market is paying for acceleration, and only a raise tends to satisfy it.

Why the same-night pairing matters

Reporting together makes Dell and Palo Alto an unintentional referendum on where AI spending is flowing. Dell sells the physical build-out — the servers and systems that turn capital budgets into installed capacity. Palo Alto sells the software layer that has to secure all of it. Both are downstream of the same force: the enormous, sustained wave of AI infrastructure investment that has defined the year, a dynamic laid out in the hyperscaler AI capex boom and reflected across the economics of AI data centers.

They also arrive against a backdrop of jittery sentiment in AI-exposed hardware. Chip and infrastructure names have swung hard on every data point about whether accelerator demand is still accelerating or merely leveling off — a nervousness visible in reactions to prints like Nvidia’s most recent quarterly report and AMD’s latest results. Dell’s backlog commentary will feed directly into that debate.

What it means

Both reports are less about whether the companies grew — they almost certainly did — and more about whether growth is still accelerating fast enough to justify valuations that have already doubled. With options markets pricing moves near 9–10%, the bar is expectations, not results.

For Dell, the tell is margins and backlog, not the EPS headline. A big revenue beat driven by low-margin AI servers, with a shrinking pipeline or memory-cost pressure, would be read as lower-quality growth despite a strong top line. Conversely, evidence that the backlog is still building and that Dell is holding the line on profitability would confirm the bull case that it is a prime, durable beneficiary of the build-out. Given four straight large beats, the risk is asymmetric: the market may need a blowout simply to hold the stock flat.

For Palo Alto, the question is whether platformization is still expanding the recurring-revenue base fast enough to justify the near-term hit to earnings. Strong next-gen ARR and large-deal counts would validate the strategy; softness there, paired with the year-over-year EPS dip, would revive the argument that the company is buying growth at the expense of profit.

What to watch next. Beyond the two prints, the same-evening pairing sets the tone for the rest of the reporting stretch, with more AI-infrastructure names on deck later in the week. If both Dell and Palo Alto beat and guide higher, expect the “AI spending is still accelerating” narrative to strengthen and the broader group to catch a bid. If either disappoints on the quality metrics — Dell’s margins or Palo Alto’s recurring revenue — the reaction will say as much about how much optimism is already baked into these stocks as about the businesses themselves.