Dell reported its fastest pace of revenue growth at any time since returning to the public market more than seven years ago, and topped analysts’ estimates for sales and profits. The stock rose as much as 39% in extended trading Thursday.
Here’s how the company fares against the LSEG consensus:
- Earnings per share: $4.86 adjusted vs. $2.94 expected
- Net worth: $43.84 billion vs. $35.43 billion expected
Revenue rose nearly 88% year over year in the quarter, which ended May 1, according to a company statement. Since its IPO in 2018, which came five years after the server maker was taken private, year-on-year growth has never exceeded 39%, a mark hit during January.
The expansion is driven by artificial intelligence, with Dell integrating servers that contain graphics processing units from the likes of Nvidia. Dell said its AI server revenue increased 757% from a year ago to $16.1 billion. For the full year, Dell now expects AI revenue of $60 billion, up from $50 billion in February. That would represent a 144% year-over-year growth.
Dell said it has more than 5,000 AI server customers, including neoclouds, private customers and enterprises.
As of late Thursday, Dell’s stock was up more than 150% for the year, compared to the S&P 500’s roughly 10% gain.
Another big winner from Dell pop is President Donald Trump, who became a shareholder in the first quarter, according to a filing with the US Office of Government Ethics. At a White House event earlier this month, Trump said, “Go out and buy a Dell.”
On Wednesday, the Pentagon announced a five-year contract with Dell worth $9.7 billion Microsoft 365 manufacturing facilities. That comes nearly five months after Dell CEO Michael Dell and his wife, Susan Dell, donated $6.25 billion to fund Trump Accounts for 25 million American children.
Dell reported revenue in the latest quarter more than tripled to $3.44 billion, or $5.24 per share, from $965 million, or $1.37 per share, a year earlier. In January, Dell raised prices to reflect higher input costs tied to a global memory shortage from the AI boom.
“We’re reinventing, it feels like, every day, and I’m sure our customers feel that pain,” said Jeff Clarke, Dell’s vice chairman and chief operating officer, on a conference call with analysts. “Unfortunately, I don’t see that changing, given the world we live in today, where you have inflation, whether it’s fuel, whether it’s raw materials, whether that’s DRAM, whether it’s NAND, CPUs. We’re living in an inflationary environment at a rate that we’ve obviously never seen before … and we continue to have everything going on.”
For the fiscal second quarter, Dell is targeting $4.80 in adjusted earnings per share on between $44 billion and $45 billion in revenue. Analysts polled by LSEG were looking for $2.98 per share in earnings and profits of $34.97 billion.
Dell has raised its forecast for fiscal year 2027, and now sees $17.90 in adjusted earnings per share, with profit between $165 billion and $169 billion in revenue, which means 47% growth in the middle of the range. Analysts polled by LSEG had expected $13.09 per share and revenue of $142.5 billion.
Revenue from Dell’s Infrastructure Solutions Group, which includes servers and other data center equipment, rose 181% to $29 billion, above StreetAccount’s consensus of $22.4 billion. Growth has accelerated across AI servers and traditional servers and network gear.
Unit sales growth for traditional servers has grown significantly, Clarke said.
“Think of the semiconductor companies, the big technology, that they use to drive some of the heavy workloads and agency workloads within their environment,” he said.
Dell foresees supply constraints in the second quarter of fiscal 2027, Clarke said. In addition to memory, the company is short on general computer processors, hard drives and other supplies, Clarke said.
Client Solutions Group, which includes PCs and services for consumers and businesses, recorded a 17% rise in revenue to $14.6 billion, on top of StreetAccount’s $12.8 billion deal. During the quarter, Dell announced new laptops and workstations for business customers.
WATCH: Dell shared a record notch after the company won a five-year Pentagon software contract
