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FinanceDell shares surge 5% after lifting fiscal 2027 forecast, sees AI server revenue tripling to $74 billion
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Dell Technologies shares rose 5% in extended trading after the company reported fiscal second-quarter results that far exceeded Wall Street expectations. The computer maker posted adjusted earnings per share of $7.04 versus the $4.92 consensus estimate, and revenue of $46.97 billion against the $44.92 billion forecast, representing 58% year-over-year growth. Dell significantly raised its full-year guidance, now projecting $25.50 in adjusted EPS on $192 billion in revenue, up from prior guidance of $17.90 EPS and $165-$169 billion revenue. The key driver was the Infrastructure Solutions Group, which posted $31.78 billion in revenue, up 89%, including $16.40 billion from AI-optimized servers. Dell now expects AI server revenue to triple in fiscal 2027 to $74 billion, compared to a previous forecast of 103% growth. The company also secured a $9.7 billion contract with the U.S. military and a $1.6 billion hardware deal with cloud provider Iren. Dell shares have gained 236% year to date.
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Michael Dell, chairman and chief executive officer of Dell Inc., speaks during the Dell Technologies World Annual Convention event in Las Vegas, Nevada, US, on Monday, May 18, 2026. Ian Maule | Bloomberg | Getty Images
Dell Technologies shares moved 5% higher in extended trading on Tuesday after the computer maker reported results and a forecast that easily cleared Wall Street expectations.
Key Financial Results (vs. LSEG Consensus)
| Metric | Actual | Expected | |--------|--------|----------| | Adjusted earnings per share | $7.04 | $4.92 | | Revenue | $46.97 billion | $44.92 billion |
Revenue came in higher than every estimate, growing approximately 58% year over year for the fiscal second quarter, which ended on July 31, according to a statement.
Net income reached $4.13 billion, or $6.34 per share, up from $1.16 billion, or $1.70 per share, in the same quarter a year ago. Adjusted earnings exclude the impact of stock-based compensation.
Fiscal Third Quarter Guidance
- Adjusted earnings per share: $6.50 on $49.0 billion in revenue (implying 81% growth)
- Analyst consensus (LSEG): $4.49 per share and $41.42 billion in revenue
Full-Year Fiscal 2027 Outlook
Dell ratcheted up its full-year view:
- Adjusted earnings per share: $25.50 on $192 billion in revenue
- Analyst consensus (LSEG): $18.92 per share and $172.67 billion in revenue
- Previous guidance (as of May 2026): $17.90 adjusted EPS, with $165 billion to $169 billion in revenue
AI Server Strength
Dell now sees AI-optimized server sales reaching $74 billion for the fiscal year, representing 200% growth. Just six months ago, the company had predicted 103% growth.
Segment Performance
Infrastructure Solutions Group (Data Center Hardware)
- Total revenue: $31.78 billion (up 89%, above $29.61 billion consensus)
- AI-optimized server revenue: $16.40 billion (above $16.07 billion consensus)
- Traditional servers and networking: $10.53 billion (up 122%)
- Storage revenue: $4.85 billion (up nearly 26%)
Client Solutions Group (PCs and Accessories)
- Revenue: $15.03 billion (up 20%, slightly below $15.08 billion consensus)
Notable Developments
- During the quarter, Dell received a $9.7 billion contract to provide software to the U.S. military.
- AI-centric cloud infrastructure provider Iren agreed to buy $1.6 billion in Dell hardware, including servers containing Nvidia chips.
Stock Performance
As of Tuesday's close, Dell shares had gained 236% year to date, while the S&P 500 index is up 11% over the same period. The stock has become a popular choice for investors seeking exposure to the continuing growth of artificial intelligence infrastructure.
In July, President Trump, who has bought Dell shares since returning to office last year, again recommended buying Dell computers.
Michael Dell, the company's founder, chairman and CEO, is now the world's fifth richest person, according to Bloomberg calculations.
Executives will discuss the results with analysts starting at 4:30 p.m. ET.
WATCH: Piper Sandler's James Fish looks ahead to Dell earnings Tuesday
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US Top News and AnalysisWestern