Dell Technologies (DELL) Raises the Bar Again as AI Demand Fuels Another Strong Quarter

Dell Technologies Inc. (NYSE: DELL ) delivered another strong quarter, with AI infrastructure demand pushing both results and expectations higher. Second-quarter revenue rose 58% year over year to a record $46.97 billion, beating analysts' $44.9 billion estimate, while adjusted EPS of $7.04 significantly exceeded the $4.91 consensus.

The biggest catalyst was Dell's AI-optimized server business, where revenue doubled to $16.4 billion. The segment ended the quarter with a record $95 billion backlog, giving Dell substantial visibility into future demand. The company also raised its fiscal 2027 AI-server revenue forecast to $74 billion from $60 billion and increased its overall revenue outlook to $192 billion from $167 billion. Adjusted EPS guidance was raised to $25.50 from $17.90.

Record AI Orders Strengthen Dell's Growth Outlook

AI infrastructure demand is proving stronger and broader than expected. Dell Technologies Inc. (NYSE:DELL) is no longer relying solely on a handful of hyperscalers. Management said demand is broadening across neoclouds, sovereign customers and enterprises, with its AI customer count surpassing 6,500. More than $130 billion in AI-server orders were booked over the past 12 months, suggesting the current AI infrastructure cycle could have considerably more room to run.

The $95 billion backlog provides unusually strong revenue visibility. Dell's AI-server backlog is more than five times the $16.4 billion of AI-server revenue generated in the latest quarter. If customers continue to deploy AI infrastructure at the expected pace, Dell has a substantial pipeline that could support growth well beyond the current quarter.

Growth is spreading beyond AI-optimized systems. Traditional servers and networking revenue more than doubled to $10.53 billion, partly reflecting demand for infrastructure supporting agentic AI workloads. This suggests AI investment is creating a broader infrastructure spending cycle rather than benefiting only high-end GPU servers.

The PC business is also showing signs of improvement. Dell Technologies Inc. (NYSE:DELL)'s commercial PC revenue increased 22%, while management said PC-unit revenue is growing at its fastest pace in five years. This gives Dell another source of growth while the AI infrastructure business remains the primary driver.

Dell is demonstrating pricing power despite component inflation. Memory shortages have increased costs across the hardware industry, but Dell has been able to raise prices to protect margins. That is important because rapidly growing revenue would be less valuable to shareholders if component costs were simultaneously compressing profitability.