Dell shares jump after Q1 beat and sharply higher AI server revenue outlook

The company, whose AI servers ​are crucial components in the global AI infrastructure build-out, is set ⁠to add $68 billion to its market value

Dell's stock skyrocketed 32.76% on Friday, "its best day ever," reports CNBC, after Dell "reported its fastest pace for revenue growth for any period since returning to the public market in 2018..." "Shares are now up 234% in 2026." Dell, which reported first-quarter earnings after the bell on Thursday, saw a flood of artificial intelligence-related demand for its servers, which contain graphics processing units from companies like Nvidia. Quarterly revenue soared nearly 88% year over year, with AI server revenue alone increasing 757% from a year earlier to $16.1 billion... Ben Reitzes, head of technology research at [research/investment firm] Melius, said he'd "never seen anything like" Dell's latest quarter. "They beat every line in the model, so this wasn't just AI, it was great execution," Reitzes told CNBC's "Squawk on the Street." "They beat whatever we would've thought...." Morgan Stanley wrote that while they expected a clean beat and raise this quarter, they're "eating our humble pie" off the back of Dell's results. "We got this one wrong, and our model/PT are under review," the analysts wrote. "This was — across the board — one of the most impressive quarters we've seen in our time covering Hardware, especially in the context of what is happening across the component universe." Read more of this story at Slashdot.

Dell's shares surged 33% on Friday as the PC maker's blockbuster results showed that ​its growing focus on AI servers was ​helping it capitalize on the data center boom, making the company one of ​the biggest beneficiaries of the new technology.The company, whose AI servers are crucial components in the global AI infrastructure build-out, is set to add $68 billion to its market value of about $206 billion, if gains hold.A household name in the ‌PC market, Dell ⁠has in ⁠recent years scaled up its AI hardware business. Dell's AI server revenue of $16.1 billion surpassed its PC unit's $14.6 billion in ​sales in the quarter.The company's infrastructure solutions segment, home to both traditional and AI-optimized servers as well as other storage, software ​and networking solutions, has consistently eclipsed PC business revenue in the past four quarters."We've been following Dell a long time and never seen anything like this. Not only do they get an "A" for ​execution, but you can make an argument that Dell is even ⁠the best ‌way to play AI out there," Melius Research analysts said.Dell's outlook for "AI and ​traditional servers are ​still very conservative," as the firm has stronger prospects for selling CPU racks to ⁠AI cloud providers like CoreWeave and Nscale, the brokerage said.The blowout ​quarter lifted shares of server makers Super Micro Computer and Hewlett Packard ​Enterprise 16% and 12%, respectively, while Dell's PC rival HP also rose 8%.Hewlett Packard Enterprise, which reports results on Monday, has also been prioritizing higher-margin product orders. But it has a smaller server business compared with Dell.Dell Chief Operating Officer Jeff Clarke acknowledged the ongoing "supply constrained" environment, particularly concerning memory chips, but said that its customers were actively securing supply for extended periods.The company has banked on balanced price ‌hikes as well as its scale and strong supplier relationships to wade through the memory crisis. Strong returns from its AI server business are also helping cushion the blow ​to margins ​from the soaring memory prices.HP, which ⁠focuses mostly on PCs and printers, reported 13.2% growth in its personal systemsdivision, while sales in Dell's PC business unit grew 17%, driven by a Windows 11 refresh cycle and growing focus on AI ​PCs.At least 13 brokerages raised their price targets on Dell stock following the results, giving it a median price target of $255, according to data compiled by LSEG. That is up from $170 before the report.Dell is on track to record its biggest one-day percentage gain if gains hold. It has a 12-month forward price-to-earnings ratio of 20.21, compared with HP's 8.39 and HPE's 14.70.

Shares in Dell Technologies Inc (NYSE: DELL) are on fire today after the legacy PC maker and AI server manufacturer announced Q1 results that blew past all expectations. And yes, AI is the driving factor behind Dell’s stellar quarter. Here’s what you need to know. Dell reports 757% year over year growth in AI server revenue On Thursday after the closing bell, Dell reported results for its first quarter of fiscal 2027, which ended on May 1. The results were nothing short of remarkable. For Q1 2027, Dell reported 88% year-over-year revenue growth for the quarter, which totaled $43.8 billion—a quarterly record for the company. Adjusted earnings per share (EPS) reached $4.86, representing growth of 214%. To put those numbers in perspective, analysts expected Dell to post significantly lower revenue and EPS. According to CNBC, analysts had expected quarterly revenue of around $35.43 billion and an adjusted EPS of $2.94. Dell easily blew past those expectations. And a big reason why comes down to the success of its Infrastructure Solutions Group (ISG) during the quarter, which handles the company’s servers and data center products. Dell’s ISG saw 181% year-over-year revenue growth during the quarter to $29.0 billion.  But what is most staggering is the division’s AI-Optimized Servers revenue. This is the revenue that Dell’s ISG takes in from its AI server business. AI-Optimized Servers revenue came in at $16.1 billion, representing a massive 757% year-over-year growth. Compare the growth of the company’s enterprise and AI division with the Client Solutions Group (CSG) division inside Dell that deals with its legacy PC and computer sales, and it’s easy to see just how much Dell’s enterprise and AI products are the driving growth factor for the company. The CSG took in $14.6 billion in revenue for the quarter, representing just 17% year-over-year growth. Dell sees AI fueling sales in Q2 and fiscal 2027 Investors are obviously ecstatic over Dell’s Q1 results, but their enthusiasm for the company’s stock this morning also likely has a lot to do with the company’s revised guidance for both its current Q2 and its full-year fiscal 2027. Dell expects demand for its AI products to be a driving factor in its growth during these two periods.  Specifically, Dell says it now expects Q2 2027 revenue to come in between $44 billion and $45 billion, with a midpoint that would represent 49% year-over-year growth. Analysts were expecting just under $35 billion in revenue for Q2, per CNBC. As for its full fiscal 2027, Dell now says it expects total revenue of between $165 billion and $169 billion. The midpoint of $167 billion would represent 47% year-over-year growth. CNBC notes that analysts had been expecting just $142.5 billion in revenue for fiscal 2027. And Dell says its growth outlook for fiscal 2027 AI-Optimized Servers revenue is even greater, in percentage terms, than for its total revenue. It expects its AI-Optimized Servers revenue to be “roughly $60 billion” for fiscal 2027, representing year-over-year growth of 144%. “We booked $24.4 billion in AI orders and recognized $16.1 billion of AI serverrevenue [in Q1 2027],” Dell’s chief operating officer, Jeff Clarke, said. “We’re increasing our AI server revenue expectations for FY27 to $60 billion, which only goes to show the AI opportunity shows no signs of slowing.” DELL stock surges on AI optimism Dell’s Q1 results and future 2027 guidance have sent the company’s stock price surging this morning. Currently in premarket trading, DELL shares are up more than 33% to $423.99 as of the time of this writing. Yesterday, the company’s share price closed at $317.05. But even before today’s premarket surge, Dell shares have had a great run since the year began. As of yesterday’s market close, the company’s stock price had increased by more than 151% since the start of 2026. Over the past 12 months, DELL stock has risen by more than 178%. Much of that stock price rise can be attributed to Dell’s inroads into the AI server market and the overall AI boom the tech industry is experiencing. Dell’s current stock price is now the highest it has ever been since the company went public for a second time in December 2018. (It was taken private in 2013). As of yesterday’s close, the value of DELL shares has grown by more than 1,200% since its second IPO.

"Significantly Exceeding Expectations": Dell Erupts 40% After AI-Fueled Beat, Outlook Hike Dell Technologies surged 38% in New York premarket trading after delivering a major earnings beat and issuing a stronger-than-expected annual sales forecast, fueled by explosive demand for AI servers that continues to reshape the hardware sector. Earnings results reinforce Dell's position as a direct beneficiary of the AI infrastructure buildout, as hyperscaler capex accelerates toward an estimated $800 billion this year and demand for compute-heavy server infrastructure remains robust. We’re building a Dell AI factory with @nvidia to power @grok for @xai @elonmusk pic.twitter.com/2aTYLtCBup — Michael Dell 🇺🇸 (@MichaelDell) June 19, 2024 Dell now expects fiscal 2027 revenue of $165 billion to $169 billion, far above its prior forecast of $138 billion to $142 billion and Bloomberg consensus of $142.1 billion. Adjusted earnings are now projected at $17.65 to $18.15 a share, versus the prior view of $12.65 to $13.15. 2027 Forecast: Sees revenue $165 billion to $169 billion, saw $138 billion to $142 billion, Bloomberg Consensus estimate of $142.12 billion Sees adjusted EPS $17.65 to $18.15, saw $12.65 to $13.15, estimate $13.14 Sees AI Server revenue $60 billion Second Quarter Forecast: Sees revenue $44 billion to $45 billion, estimate $35.06 billion Sees AI Server revenue about $15.5 billion Sees adjusted EPS $4.70 to $4.90, estimate $3.05 First-quarter results crushed the analyst estimates tracked by Bloomberg. Revenue soared  88% year over year to $43.8 billion, while adjusted EPS hit $4.86, compared with estimates of $2.99. AI server revenue came in at $16.1 billion, exceeding estimates, while AI server backlog rose to $51.3 billion. First Quarter Results: Total net revenue $43.84 billion, +88% y/y, estimate $35.52 billion AI server revenue $16.1 billion, estimate $13.1b Traditional servers and networking revenue $8.5 billion, +92% Adjusted EPS $4.86 vs. $1.55 y/y, estimate $2.99 AI server backlog $51.3 billion, estimate $45.33 billion Infrastructure Solutions Group net revenue $29.01 billion vs. $10.32 billion y/y, estimate $22.3 billion Storage revenue $4.33 billion, +8.5% y/y, estimate $4.16 billion Client Solutions Group net revenue $14.61 billion, +17% y/y, estimate $12.93 billion Commercial revenue $13.02 billion, +18% y/y, estimate $11.41 billion Consumer revenue $1.59 billion, +8.6% y/y, estimate $1.46 Cash flow from operations of $4.1 billion Adjusted gross margin 18.1% vs. 21.6% y/y, estimate 17.3% Adjusted operating margin 9.7% vs. 7.1% y/y, estimate 7.82% Adjusted operating income $4.24 billion vs. $1.67 billion y/y, estimate $2.77 billion "Our record Q1 performance reflects strong in-quarter demand, as well as our pace of innovation across the full stack of PCs, compute and storage," said Jeff Clarke, vice chairman and chief operating officer, Dell Technologies. "We booked $24.4 billion in AI orders and recognized $16.1 billion of AI server revenue. We're increasing our AI server revenue expectations for FY27 to $60 billion, which only goes to show the AI opportunity shows no signs of slowing." "Execution was exceptionally strong across the business – from supply chain to sales to pricing – driving record revenue of $43.8 billion, record EPS, record Q1 cash flow of $4.1 billion and continued strong shareholder returns of $2.1 billion," said David Kennedy, chief financial officer, Dell Technologies. "We entered FY27 with clear momentum, raising our full-year revenue outlook to $167 billion at the midpoint, up nearly 50% year over year." Goldman analysts framed the earnings as "Broad-based beat drives raised FY outlook." Analyst Katherine Murphy's first take noted, "DELL should trade higher on an earnings beat & better-than-expected FY27 guidance driven by strong AI server expectations and strength in PC profitability." Murphy's 12-month price target is $230 based on 15.0x our NTM+1Y EPS. UBS analyst David Vogt raised his target for the stock by a staggering 81% but kept the rating neutral. Here's what others on Wall Street are saying (courtsey of Bloomberg): Citi (buy, PT $290) "Dell reported results significantly exceeding expectations," and the outlook is positive. Vital Knowledge "There's absolutely nothing to complain about w/huge upside and a big guidance hike (demand is benefiting from AI, but the non-AI parts of the business performed well too, and component price inflation didn't crimp margins)" Bloomberg Intelligence "Dell's robust 1Q sales and EPS beat, along with its sharply higher outlook, was broad-based and suggests sustained demand strength" "Even as demand pull-forward drove 1Q results, the magnitude of the guidance increase suggests strength in both AI and traditional servers will continue in coming quarters" Shares of Dell topped $440 in premarket trading and were up nearly 40%. The trend has gone absolutely parabolic over the past year. We asked earlier this week: "Will $800 Billion in AI Capex Spending Boost US GDP?" Tyler Durden Fri, 05/29/2026 - 07:20