Dell jumps after blowout quarter, upgrades fiscal 2027 outlook

Dell Technologies reported results for the quarter ended July 31, with revenue of $46.97 billion and adjusted earnings per share of $7.04. Net income was $4.13 billion, or $6.34 a share, compared with $1.16 billion, or $1.70 a share, a year earlier. Adjusted operating income was $5.93 billion. Shares rose about 8% in extended trading.

The company raised its fiscal 2027 revenue outlook to $192 billion from $167 billion and lifted its adjusted EPS forecast to $25.50 from $17.90. Analysts had expected about $172.7 billion in revenue and $18.92 in adjusted EPS.

Dell’s Infrastructure Solutions Group generated $31.78 billion in the quarter, up 89% year over year. AI-optimized servers accounted for $16.40 billion of that revenue, roughly double the prior year. Dell reported $60.9 billion in AI server orders during the quarter and an AI-related backlog of $95 billion, up from $51.3 billion previously. Management raised its fiscal 2027 revenue forecast for AI-optimized servers to $74 billion from $60 billion and projected AI would represent 75% of data-center demand by the end of the decade.

Traditional servers and networking brought in $10.5 billion, up 122% year over year, as customers refreshed broader infrastructure around AI deployments. Dell said it booked more than $130 billion in AI server orders over the past 12 months and that its customer count exceeded 6,500.

Storage revenue was $4.9 billion, up 26%, and PC revenue rose 20%, led by commercial buyers. Chief Operating Officer Jeffrey Clarke said the PC unit is growing at its fastest pace in five years.

For the fiscal third quarter, Dell guided to adjusted EPS of $6.50 on revenue of about $49 billion. The company closed the regular session at $425 before the after-hours move. Some analysts raised price targets following the report.

Nicholas Mugalli, founder and CEO of World Trade Securities, called the results “an absolute demolition of Wall Street’s consensus expectations” and highlighted the operating-income beat. Other industry observers noted AI-related demand is spreading across cloud operators, governments and enterprises.

Dell reported it has faced industry-wide memory shortages and that it raised prices on some products. The company said it will need to manage production, component costs and conversion of backlog into revenue as it delivers on the higher guidance.