Dell lifts 2027 outlook on AI server boom

Dell Technologies (DELL) delivered fiscal second-quarter 2026 revenue of $46.97 billion, above analyst expectations. Adjusted earnings per share came in at $7.04, also surpassing consensus estimates. Revenue grew about 58% year over year for the quarter, which ended on July 31.

The company’s performance was heavily supported by AI-optimized servers, which generated $16.4 billion in revenue in the quarter. This figure was roughly double the level a year earlier, underscoring rapid growth in demand for hardware capable of running artificial intelligence workloads.

Dell’s (DELL) Infrastructure Solutions Group reported fiscal second-quarter revenue of $31.78 billion, an 89% increase year over year. Within this segment, Traditional Servers & Networking revenue rose 122% to $10.53 billion, while storage revenue reached $4.85 billion.

AI-optimized servers were a central driver of this expansion, as customers sought systems configured for intensive AI tasks. The strength in this portfolio translated into significant order activity and a growing pipeline for future deliveries.

During the quarter, Dell booked $60.9 billion of AI server orders, reflecting broad-based appetite for its AI infrastructure offerings. The company ended the period with a record $95 billion AI backlog, indicating substantial contracted demand yet to be fulfilled.

Large agreements contributed to this order momentum. Dell received a $9.7 billion contract to provide software to the U.S. military, and AI-centric cloud infrastructure provider Iren agreed to purchase $1.6 billion in Dell hardware, including servers containing Nvidia (NVDA) chips.

On the back of these trends, Dell raised its full-year fiscal 2027 revenue guidance by $25 billion to $192 billion. The company now expects $74 billion in AI-optimized server revenue for the fiscal year, which would represent a 200% increase.

Dell also increased its earnings outlook, lifting full-year adjusted EPS guidance to $25.50 and GAAP EPS guidance to $24.37. These revisions reflect both the scale of AI-related demand and management’s expectations for profitability as the backlog converts into revenue.

The stronger-than-expected quarterly results and upgraded outlook were met with a positive market response. Shares rose about 9% in extended trading after the announcement.

Investors responded to the combination of rapid AI server revenue growth, a sizable AI order book, and higher full-year revenue and earnings guidance. The results positioned AI infrastructure as a central engine of Dell’s near-term financial trajectory.