Dell Technologies reports record earnings as AI infrastructure demand drives 88% revenue surge

Dell Technologies delivered record financial results for the first quarter of fiscal 2027, driven by an unprecedented surge in demand for artificial intelligence infrastructure. The company reported revenue of $43.84 billion, an 88% increase year-on-year, while non-GAAP earnings per share rose 214% to $4.86. The results underscored the company’s successful pivot from a traditional PC manufacturer to a central provider of AI hardware, with the market responding swiftly to the data. Following the announcement, Dell shares surged approximately 39% in after-hours trading, reaching a fresh high of $429.15 by Friday’s close.

The primary growth engine was the Infrastructure Solutions Group, which saw AI-optimized server revenue explode by 757% year-on-year to $16.1 billion. Total revenue within this segment jumped 181% to a record $29.0 billion, supported by strong performance in traditional servers and networking, which rose 92% to $8.5 billion. Operating income for the group more than doubled, climbing 206% to $3.1 billion. This performance highlights the accelerating deployment of AI data centres by hyperscalers, enterprises, and cloud providers, creating a supply-demand imbalance that has benefited Dell’s hardware business significantly.

Dell also reported robust growth in its Client Solutions Group, which houses the PC business. Revenue in this segment increased 17% year-on-year to $14.6 billion, with commercial client revenue hitting a record $13 billion. The growth was attributed to enterprise refresh cycles and rising demand for AI-capable personal computers. Overall, the company booked $24.4 billion in AI orders during the quarter and exited the period with a record AI backlog of $51.3 billion, providing visibility into future demand.

In response to the strong quarterly performance, Dell raised its full-year fiscal 2027 revenue guidance to between $165 billion and $169 billion, a significant increase from the previous outlook of $138 billion to $142 billion. The company also increased its fiscal 2027 AI server revenue forecast to $60 billion, up from an earlier expectation of $50 billion. Management provided a positive outlook for the second quarter, expecting revenue between $44 billion and $45 billion, with adjusted EPS of $4.80.

Wall Street analysts reacted positively to the results, with several institutions upgrading their outlooks. Susquehanna upgraded Dell Technologies to “Positive” from “Neutral” and raised its price target to $700 from $138, citing accelerating growth in the AI server business. Barclays also raised its price target to $550 from $168, maintaining an “Overweight” rating. The stock has now surged 234.37% year-to-date and 269.97% over the past 52 weeks, reflecting strong investor confidence in the company’s transition to a key AI infrastructure provider.