An 88% revenue surge, $60 billion in AI server guidance, and stock up 31% after hours tells a story
Dell Technologies reported its fastest revenue growth since returning to public markets in 2018, posting an 88% year-over-year increase for the quarter ending May 1 and sending its stock up more than 31% in extended trading Today. The results were not close. Analysts had expected $35.4 billion in revenue. Dell delivered $43.8 billion.
Adjusted earnings per share came in at $4.86, against an estimate of $2.94. Net income more than tripled to $3.44 billion from $965 million a year earlier. Cash flow from operations reached a record $4.1 billion for a first quarter, up 46% year-over-year. Dell returned $2.1 billion to shareholders through buybacks and dividends during the period.
The company raised its full-year revenue guidance to a range of $165 billion to $169 billion, implying roughly 47% growth at the midpoint. Full-year adjusted earnings guidance moved to $17.90 per share. Mizuho set a price target of $350 on the stock following the report.
What is driving the numbers
The short answer is AI servers. Dell recognized $16.1 billion in AI server revenue during the quarter, a 757% year-over-year increase, and booked $24.4 billion in new AI orders. The company now expects $60 billion in AI server revenue for the full fiscal year, up from a $50 billion projection issued in February, and entered the year carrying a record backlog of $43 billion in AI server orders.
Dell sells servers built around Nvidia graphics processing units to more than 5,000 customers spanning neoclouds, sovereign government clients, and large enterprises. Infrastructure Solutions Group revenue rose 181% to $29 billion. Traditional servers and networking grew 92% to $8.5 billion. Storage grew 8% to $4.3 billion.
The Client Solutions Group posted a 17% revenue increase to $14.6 billion, with commercial client revenue up 18% to $13 billion.
Supply and pricing pressures
Dell raised prices in January to account for higher input costs tied to a global memory shortage. The repricing is ongoing, with the company flagging inflationary conditions across memory, processors, storage, and raw materials. Supply constraints are expected to continue into the second half of fiscal 2027.
The political dimension of Dell’s quarter
Dell’s results arrived alongside two developments that connect the company to the current administration. President Trump disclosed a personal stake in Dell during the first quarter, per U.S. government ethics filings, and publicly encouraged people to buy the stock at a White House event earlier this month.
On Wednesday, the Pentagon announced a five-year contract with Dell valued at $9.7 billion for Microsoft 365 productivity services, coming roughly five months after Michael Dell and his wife donated $6.25 billion to fund Trump Accounts for 25 million American children. The proximity of those events to a quarter that dramatically exceeded Wall Street’s expectations adds context to The company’s federal relationship.
What comes next
For the current quarter ending in late July, Dell guided for revenue between $44 billion and $45 billion, against analyst estimates of $34.97 billion. Adjusted earnings guidance came in at $4.80 per share, compared to analyst expectations of $2.98.
The company’s stock was already up more than 150% for the year heading into Today, against the S&P 500’s roughly 10% gain. Jane Street added 5.29 million shares in the first quarter, one of the largest institutional position increases on record for the stock. The numbers suggest the AI infrastructure cycle is still accelerating, and Dell remains one of its most direct beneficiaries.