Dell Technologies Inc. has sharply increased its full-year sales outlook to around $192 billion, driven by booming enterprise adoption of artificial intelligence infrastructure.

  • Dell expanded its annual revenue forecast by $25 billion to $192 billion, surpassing Wall Street expectations of $173.8 billion. 
  • The company projects $74 billion in AI server sales for the fiscal year, a threefold surge from the previous year. 
  • Q2 revenue surged 58% year-over-year to $47 billion, while earnings hit $7.04 per share, well above projections. 

Dell Technologies Inc. (DELL) significantly raised its full-year financial outlook on Tuesday, driven by explosive global demand for AI-optimized servers.

The Texas-based laptop and AI server maker projected annual revenue of around $192 billion for the fiscal year ending in January 2027. The new forecast represents a $25 billion increase from its previous target of $167 billion set in May and comfortably tops average analyst estimates of $173.3 billion, according to Fiscal.ai data.

The revised outlook reflects a five-quarter streak of guidance that has exceeded Wall Street expectations.

Most of the optimism arrived from strong growth in the traditional servers and networking business, up 122% year-on-year, with AI servers (up 100%) and storage business (up 26%) comfortably catching up. 

“In just the past two quarters, we have generated almost as much revenue from traditional servers and networking as we have in any prior full year in company history,” Jeffrey Clarke, chief operating officer of Dell, said in an earnings call

AI Demand Drives Massive Server Backlog

The central driver behind Dell's acceleration is its Infrastructure Solutions Group, particularly its lineup of AI servers integrated with Nvidia Corp. processing chips. Dell expects to generate $74 billion from AI server sales alone this fiscal year, a threefold year-over-year increase.

The company reported an AI server backlog of $95 billion at the end of its fiscal second quarter, underscoring strong commitment from high-profile infrastructure providers such as CoreWeave Inc. (CRWV) and Nscale Global Holdings Ltd., as well as corporate enterprise clients.

Q2 Earnings, Revenue Surges Past Estimates

For the fiscal second quarter ended July 31, Dell posted a 58% jump in total net revenue to $47 billion, up from $29.8 billion in the prior-year period.

Adjusted earnings came in at $7.04 per share, significantly outperforming Wall Street’s consensus estimate of $4.90 per share. Net income reached $4.13 billion, or $6.34 per diluted share.

Dell's Client Solutions Group, which includes its personal computer business, recorded a 20% revenue gain to $15 billion, with operating income climbing 42% to $1.1 billion. Despite overall declines in industry PC shipments, Dell maintained strong profitability by passing rising memory chip costs on to consumers through higher unit prices.

Cost Discipline Aids Bottomline

Alongside revenue gains, strict expense controls pushed operating expenses down to just 8% of sales, marking the lowest ratio in Dell’s history.

For the full fiscal year, Dell now expects adjusted earnings of $25.50 per share, well above the consensus forecast of $19.10 per share.

During the second quarter, Dell returned $4.3 billion to shareholders via dividends and share buybacks. The board of directors declared a quarterly dividend of $0.63 per common share, payable October 30 to shareholders of record as of October 20.

Following the announcement, Dell stock jumped around 8% in extended trading. The shares have more than tripled over the year.

DELL Stock: Retail View 

Retail sentiment on Stocktwits was ‘extremely bullish’ with ‘extremely high’ message volumes. 

DELL stock has surged 232% year-to-date. The Vanguard Technology ETF slipped 1.3%.

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