Dell's AI Server Demand Drives Strong Profit Outlook and Record Backlog

Dell Annual Profit Outlook Tops Estimates on AI Server Demand

Dell Technologies Inc. gave a profit outlook for the year that exceeded estimates and said it had seen a significant increase in orders for servers to run AI networks. Earnings, excluding some items, will be about $9.40 a share in the fiscal year ending in January 2026, an increase from a February forecast, Texas-based Dell said Thursday in a statement. The company reiterated its sales forecast of roughly $103 billion. Analysts, on average, projected profit of $9.21 a share on revenue of $103 billion.

Dell warns 'nonlinear' demand for AI servers may 'persist'

Dell has confirmed an order backlog of $14.4 billion for AI optimized servers, yet it is tempering investors' expectations for future sales by talking about demand being lumpy and dependencies in the pipeline. The Texas-based IT giant is one of the chief beneficiaries of the AI datacenter gold rush, making itself a prime infrastructure provider thanks to the close links it has built with Nvidia, chief supplier of GPU accelerator kit. "We experienced exceptionally strong demand for AI optimized servers, building on the momentum discussed in February and further demonstrating that our differentiation is winning in the marketplace," Dell vice chair and chief operating officer Jeff Clarke told investors on a call to discuss its Q1 FY26 earnings. But while the company is profiting from making itself a one-stop AI infrastructure shop, and demand remains high, Clarke struck a note of caution. "AI momentum continues to remain strong. That said, given the scale of these opportunities, variability and timing and choices around technology, the inherent nonlinear nature of demand and associated shipments is likely to persist," he said. When asked how the AI server market is shaping up for the near future, Clarke responded: "The customer deployments that we have in front of us are large, they're complex, they have very detailed scheduled deliveries. There's lots of dependencies on this. We've talked about this business being lumpy and nonlinear." The Register has covered at length how the AI frenzy has bumped demand for datacenter capacity, while Nvidia's increasingly power-hungry parts are causing headaches as facilities need power and cooling upgrades to support them, and sometimes entirely new bit barns have to be built, all leading to delays. "The dependencies in this business are waiting for datacenters to be built, power to be provided, direct liquid cooling infrastructure put in place. We're orchestrating a highly complex supply chain. You've probably seen reference that a GB200 NVL 72 rack has 1,200,000 parts in it. Coordinating and orchestrating that across our value add, whether that be CDUs, cold plates, the racks themselves, power shelves, what have you. That's what we're working through," Clarke added. These factors are what led to the $14.4 billion backlog of orders, which Clarke says is a good place to be in. "We love where the backlog is. It's healthy," he added. The analysts seem to agree. Dell's massive AI backlog explained the upbeat forecast for the firm, with its stock up after an extended trading session on Thursday. For its fiscal 2026 first quarter ended May 2, Dell made revenue of $23.4 billion, up 5 percent on the same period last year, with operating income of $1.2 billion, up 21 percent year-on-year. The Infrastructure Solutions Group (ISG) saw revenue up 12 percent to $10.3 billion, thanks to that AI demand, with the Servers and Networking segment up 16 percent. The Client Solutions Group (CSG) saw its revenue up 5 percent to $12.5 billion, but while Commercial Clients were up by 9 percent, Consumer revenue was down 19 percent as individual buyers held off purchasing PCs - perhaps a symptom of US President Trump's "volatile trade policies". On the subject of those trade policies, and tariffs in particular, Dell claimed it had not really been affected. "We did not make any price moves in the quarter. We were steady. We have been through this before. And I think we weathered the storm quite well and ultimately took care of our customers and served them quite well," Clarke said. In response to a later question, he conceded that there had been some "pull forward" from customers buying more than planned ahead of the tariffs being imposed, which could lead to less than expected demand in later quarters. "I'm certain we had some customers pulling demand. They certainly saw what was happening in the marketplace and how dynamic things were," he said. "We did see a slowdown in month three. Month one was greater than January. Month two was greater than February. Month three slowed in weeks 10 through 12. And actually, all three US businesses, commercial PCs, traditional servers, and storage. So clearly there was a bump along the journey there," Clarke added. For its second quarter, Dell is expecting revenue somewhere between $28.5 billion and $29.5 billion, up about 16 percent on last year. The full year prediction is for takings to be between $101 billion and $105 billion, up about 8 percent. ®

Dell raises full-year profit forecast on strong AI server demand, shares rise

May 29 (Reuters) - Dell Technologies (DELL.N), opens new tab raised its annual profit forecast on Thursday, signaling growing demand for its AI-powered servers that are equipped with Nvidia's (NVDA.O), opens new tab powerful chips, sending the computer hardware maker's shares up 10% in extended trading. Companies such as Dell and Super Micro Computer (SMCI.O), opens new tab have benefited from the growing demand for these servers, but the high cost of producing them and tough competition have pressured margins. "We generated $12.1 billion in AI orders this quarter alone, surpassing the entirety of shipments in all of FY25 and leaving us with $14.4 billion in backlog," Dell's Chief Operating Officer Jeff Clarke said. The results follow the U.S. Department of Energy's announcement on Thursday that it would launch a new supercomputer, named Doudna, which will use Dell and Nvidia's advanced technology to perform complex computing tasks. Dell now expects annual adjusted profit to be $9.40 per share, compared with its prior forecast of $9.30 per share. The company reiterated its annual revenue outlook. It forecast second-quarter revenue to be between $28.5 billion and $29.5 billion, above analysts' average estimate of $25.05 billion, according to data compiled by LSEG. Dell's adjusted profit forecast for the second quarter of $2.25 per share was also above estimates of $2.09. First-quarter revenue came in at $23.38 billion, compared with estimates of $23.14 billion. Dell's revenue from its infrastructure solutions group, which includes storage, software and server offerings, rose 12% to $10.32 billion. Revenue from its client solutions group, that houses its PC business, rose 5% to $12.51 billion. On an adjusted basis, the company earned $1.55 per share in the first quarter, missing estimates of $1.69. Reporting by Jaspreet Singh in Bengaluru; Editing by Shounak Dasgupta Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Business

Dell shares climb after company raises full-year profit outlook on AI demand

A Dell Technologies sign is seen in Round Rock, Texas, on June 2, 2023.Brandon Bell | Getty Images Shares of Dell Technologies rose 10% on Thursday after the company raised its full-year earnings forecast and issued a stronger-than-expected forecast for the current quarter. However, Dell's adjusted earnings per share came up short versus LSEG estimates on in-line revenue. Here's how the computer maker did versus LSEG consensus estimates: Dell said it expects $2.25 in adjusted earnings per share for the current quarter, with between $28.5 billion and $29.5 billion in revenue. That was significantly higher than LSEG expectations. Company officials attributed the strong guidance to $7 billion in artificial intelligence systems that are expected to ship during the quarter, which are higher-margin than other Dell systems. For the full year, Dell still expects about $103 billion in revenue, in line with LSEG expectations, but it raised its forecast for full-year adjusted earnings to $9.40, which was a 10 cent increase from the company's prior outlook. Dell is one of Nvidia's primary vendors that builds systems around the chipmaker's AI graphics processing units. Dell said on Thursday that it was seeing "unprecedented demand" for AI systems, especially for second-tier cloud providers, such as Coreweave. Texas-based Dell said that it has $14.4 billion in confirmed orders for AI systems in its backlog that will ship in the coming quarters. It recorded $12.1 billion in confirmed AI orders during the first quarter, the company said. These numbers will turn into recorded revenue when Dell ships the system to its clients. In February, Dell said it expected $15 billion in AI server sales during its fiscal 2026, up from $10 billion last year. Overall, Dell's revenue grew 5% on an annual basis. It said it expects revenue to grow 8% during the fiscal year. Dell's server business is reported as part of its Infrastructure Solutions Group, which had $10.3 billion in sales during the quarter, a 12% rise. Of that, $6.3 billion was sales for servers and networking, and $4 billion was for computers that store data. The company's laptop and PC business, its Client Solutions Group, recorded $12.5 billion in sales as the global PC market is expected to recover this year after several slumping years. The computer maker also said it significantly stepped up its shareholder capital return during the quarter, spending $2.4 billion on share repurchases and dividends during the period. It spent $2.58 billion on share repurchases for all of its fiscal 2025, which ended in January.

Dell's stock moves higher on strong AI server demand and bullish revenue outlook - SiliconANGLE

Dell's stock moves higher on strong AI server demand and bullish revenue outlook Dell Technologies Inc. cited strong demand for artificial intelligence servers as the reason for its extremely bullish revenue guidance today, sending its stock higher in the after-hours trading session. The company issued its forecast shortly after posting mixed first-quarter financial results, where it beat analyst's expectations on sales but came up short on earnings. The company reported earnings before certain costs such as stock compensation of $1.55 per share, falling some way short of Wall Street's target of $1.69, but it made up for it with revenue, which came to $23.38 billion in the quarter, up 5% from a year earlier and above the $23.14 billion forecast. All told, it delivered net income of $965 million, down ever so slightly from the $992 million profit it recorded in the year-ago period. Investors were willing to forgive the mixed results once they saw Dell's guidance for the current quarter, though. The company said it's looking for second-quarter sales of between $28.5 billion and $29.5 billion, which is way higher than the $25.26 billion consensus estimate. It's also looking for earnings of $2.25 per share in the current quarter, ahead of the Street's target of $2.18. Dell said the strong guidance stems from its hopes that it will ship more than $7 billion worth of AI systems during the quarter. Those systems are notably much higher-margin than its standard data center servers and storage arrays. The company also reiterated its full-year revenue forecast of around $103 billion at the midpoint of its guidance range, in-line with the Street's expectations, but bumped up its annual earnings outlook to $9.40 per share, up from $9.30 before and ahead of the Street's call for $9.17. Dell has emerged as one of the primary vendors for companies looking to buy AI systems powered by Nvidia Corp.'s graphics processing units, along with the likes of Hewlett-Packard Enterprise Co. and SuperMicro Computer Inc. In a conference call today, the company said it was seeing "unprecedented demand" for its AI systems, especially from "second-tier cloud providers" such as the now publicly-traded Coreweave Inc. Dell Chief Operating Officer Jeff Clarke (pictured) said the company bagged $12.1 billion worth of orders for AI systems in the first quarter, "surpassing the entirety of shipments" it received in fiscal 2025. He added that the company now has a $14.4 billion backlog for AI servers waiting to be shipped to customers. According to Clarke, those numbers will turn into recorded revenue once the company ships the systems to its clients. It's expecting AI server sales to top $15 billion in fiscal 2026, up from $10 billion the year before. That said, Clarke told analysts on the conference call that while the AI market is exciting, it's also somewhat "lumpy". "The customer deployments we have in front of us are large, and they're complex," he said. "The dependencies in this business are waiting for data centers to be built, power to be provided directly with cooling infrastructure. We're orchestrating a highly complex supply chain." Dell's AI servers fall within its Infrastructure Solutions Group, which generated $10.3 billion in sales during the quarter, up 12% from a year earlier. Servers accounted for the bulk of those sales at $6.3 billion, while $4 billion was from systems that store data. The report came just one week after Dell hosted its annual user conference, Dell Technologies World, where much of the focus was on the company's AI strategy. There, Clarke appeared on SiliconANGLE Media's livestreaming studio theCUBE, where he talked about how the company is looking to drive the next industrial revolution with AI: The company also has an even bigger business called the Client Solutions Group, which sells personal computers, and it generated just over $12.5 billion in sales during the quarter. Dell is pitching high-end "AI PCs" and gaming rigs in its PC business, and it said it's expecting the market to recover in fiscal 2026 following a slump last year. But the division's overall profitability slipped due to what Clarke said was "pricing pressure from rivals". Revenue from consumer PCs fell 19% from a year earlier, while the unit's total operating income was down 16%. Dell also revealed that it has stepped up its shareholder capital returns during the quarter, spending $2.4 billion on share repurchases and dividends. In the whole of fiscal 2025, it spent $2.58 billion on buying back shares. Investors were pleased enough with Dell's results, for the company's stock gained just over 2% in late-trading. The after-hours action means its stock is now down just 1% in the year to date. Dell's results came just a day after its biggest rival in the PC market, HP Inc., missed expectations on earnings and saw its stock fall more than 8%. That company issued a weak profit outlook and slashed its annual earnings forecast, citing concerns about the economy and U.S. President Trump's trade tariffs. Another of Dell's rivals, NetApp Inc., was also down in the dumps today after issuing soft revenue guidance for the current quarter. The company, which competes with Dell in the data center segment, said it's looking for second-quarter sales of $1.53 billion at the midpoint of its range, way below the analyst's view of $1.6 billion. The company did okay in the quarter just gone, reporting earnings of $1.93 per share on sales of $1.73 billion, surpassing the Street's targets of $1.90 in earnings and $1.72 billion in revenue. But investors were clearly worried about its future prospects, and NetApp's stock fell more than 5% in late trading.

Why These Wall Street Analysts Are More Bullish on Dell After Mixed Results

JPMorgan said Dell's outlook is improved by a clearer supply chain picture, which Nvidia's results helped illustrate this week. Dell (DELL) delivered fiscal first-quarter profits that missed analysts' estimates, but better-than-expected sales driven by growth in its AI server division prompted several analysts to lift their price targets. JPMorgan analysts raised their price target to $125 from $111, pointing to Dell's $14.4 billion AI server backlog, driven by record orders in the quarter. The bank cited the "combination of readiness from multiple customers as well as better supply visibility" as reasons for optimism, which Dell partner Nvidia's (NVDA) quarterly results helped illustrate earlier this week. Shares of Dell were down about 3% at just above $109 in recent trading Friday, giving JPMorgan's target about 15% upside. The stock has slid roughly 5% in 2025 so far. Citi lifted its target to $135, similarly citing Dell's "robust momentum [and] competitive positioning of [Dell's] AI portfolio." Dell expects to deploy $7 billion worth of AI servers in the current quarter and more than $15 billion in 2025, the bank noted. Morgan Stanley also moved its target to $135, from $126 previously. Meanwhile, Bank of America raised its target to an even more bullish $155, up from $150. UBS, which trimmed its target, still expects the shares to rise, adjusting to $145 from $150. The bank cautioned clients that despite strong order numbers, the inconsistent timing of orders and when revenue from them is recognized could worry investors.

Dell Stock Climbs as 'Unprecedented Demand' for AI Servers Powers Revenue Growth

Dell (DELL) reported fiscal first-quarter revenue that topped analysts' expectations, driven by growth in artificial intelligence server sales. Shares of the Nvidia (NVDA) partner rose about 4% in after-hours trading. The stock was down roughly 1% for 2025 through Thursday's close. Dell's quarterly revenue grew 5% year-over-year to $23.38 billion, above the analyst consensus from Visible Alpha. Servers and networking revenue jumped 16% to a record $6.3 billion, driven by what Chief Operating Officer Jeff Clarke called "unprecedented demand for our AI-optimized servers." The company generated $12.1 billion in AI orders in the first quarter, more than it delivered in the entirety of the past fiscal year. While adjusted net income of $1.09 billion, or $1.55 per share, rose from $959 million, or $1.32 per share, in the year-ago quarter, the figures came up short of Wall Street estimates. Looking ahead, Dell maintained its fiscal 2026 revenue forecast of $101 billion to $105 billion and lifted its adjusted EPS projection to $9.40 from $9.30 at the midpoint. Analysts had called for $102.07 billion in revenue and adjusted EPS of $8.95, respectively. Morgan Stanley analysts last week said Dell's AI segment is "gaining momentum," and suggested the company could see nearly $20 billion in AI server revenue this year.

Dell raises annual profit forecast on strong AI server demand

Dell and Super Micro Computer have benefited from growing demand for such servers, but the high cost of producing them and tough competition have pressured margins. "We generated $12.1 billion in AI orders this quarter alone, surpassing the entirety of shipments in all of fiscal 2025 and leaving us with $14.4 billion in backlog," Dell's chief operating officer Jeff Clarke said.Dell raised its annual profit forecast on Thursday, signaling growing demand for its AI-powered servers that are equipped with Nvidia's powerful chips. Shares of the company, whose servers are used by customers such as Elon Musk's AI startup xAI and CoreWeave, rose 2% in extended trading. Dell and Super Micro Computer have benefited from growing demand for such servers, but the high cost of producing them and tough competition have pressured margins. "We generated $12.1 billion in AI orders this quarter alone, surpassing the entirety of shipments in all of fiscal 2025 and leaving us with $14.4 billion in backlog," Dell's chief operating officer Jeff Clarke said. The results follow the U.S. Department of Energy's announcement on Thursday that it would launch a new supercomputer, named Doudna, which will use Dell and Nvidia's advanced technology to perform complex computing tasks. Dell now expects annual adjusted profit to be $9.40 per share, compared with its prior forecast of $9.30 per share. The company also reiterated its annual revenue outlook. It forecast second-quarter revenue to be between $28.5 billion and $29.5 billion, above analysts' average estimate of $25.05 billion, according to data compiled by LSEG. Dell's adjusted profit forecast for the second quarter of $2.25 per share was also above estimates of $2.09. The company's first-quarter revenue of $23.38 billion beat expectations of $23.14 billion, while its adjusted profit of $1.55 per share missed estimates of $1.69. "We note potential near-term margin pressure from competitive pricing, tariffs, and geographic mix shifts," Shreya Gheewala, equity analyst at CFRA Research, said. Revenue from Dell's infrastructure solutions group, which includes storage, software and server offerings, rose 12%, while revenue from its client solutions group, that houses its PC business, rose 5%. PC refresh cycle is slower than before, but signs show users are moving to Windows 11 PCs, which include AI PCs, Clarke added.

These Analysts Revise Their Forecasts On Dell Following Q1 Results - Dell Technologies (NYSE:DELL)

Dell Technologies Inc DELL reported mixed financial results for the first quarter on Thursday after the bell. Dell reported first-quarter revenue of $23.38 billion, beating the consensus estimate of $23.14 billion, according to Benzinga Pro. The company reported adjusted earnings of $1.55 per share, missing analyst estimates of $1.69 per share. "We achieved first-quarter record servers and networking revenue of $6.3 billion, and we're experiencing unprecedented demand for our AI-optimized servers," said Jeff Clarke, vice chairman and chief operating officer of Dell. "We generated $12.1 billion in AI orders this quarter alone, surpassing the entirety of shipments in all of FY25 and leaving us with $14.4 billion in backlog." Dell expects second-quarter revenue to be between $28.5 billion and $29.5 billion. The company anticipates second-quarter adjusted earnings of $2.25 per share. Dell expects fiscal 2026 revenue of $101 billion to $105 billion and full-year adjusted earnings of $9.40 per share. Dell shares fell 3.4% to trade at $109.74 on Friday. These analysts made changes to their price targets on Dell following earnings announcement. Latest Startup Investment Opportunities: Rad IntelDealMakerMin. Investment$1,000IndustryAIGet Offer Elf LabsDealMakerMin. Investment$974IndustryTechGet Offer UBS analyst David Vogt maintained Dell Technologies with a Buy and lowered the price target from $150 to $145. JP Morgan analyst Samik Chatterjee maintained the stock with an Overweight rating and raised the price target from $111 to $125. Barclays analyst Tim Long maintained Dell Technologies with an Equal-Weight rating and raised the price target from $116 to $123. Raymond James analyst Simon Leopold maintained the stock with an Outperform rating and raised the price target from $144 to $150. Considering buying DELL stock? Here's what analysts think: Read This Next: Top 3 Materials Stocks That Could Blast Off This Month Photo via Shutterstock DELLDell Technologies Inc$109.89-3.29%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum23.10Growth83.52QualityNot AvailableValue36.57Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Dell Q1 Earnings: Revenue Beat, EPS Miss, Company Highlights 'Unprecedented Demand' For AI-Optimized Servers - Dell Technologies (NYSE:DELL)

Dell Technologies Inc DELL reported financial results for the first quarter on Thursday after the bell. Here's a rundown of the report. Q1 Earnings: Dell reported first-quarter revenue of $23.38 billion, beating the consensus estimate of $23.14 billion, according to Benzinga Pro. The company reported adjusted earnings of $1.55 per share, missing analyst estimates of $1.69 per share. Total revenue was up 5% year-over-year. Infrastructure Solutions Group revenue totaled $10.3 billion in the first quarter, up 12% year-over-year. Client Solutions Group revenue came in at $12.5 billion, up 5% year-over-year. Cash flow from operations was $2.8 billion in the first quarter. Dell said it returned $2.4 billion to shareholders via share repurchases and dividends in the quarter. The company ended the period with $7.7 billion in cash and cash equivalents. "We achieved first-quarter record servers and networking revenue of $6.3 billion, and we're experiencing unprecedented demand for our AI-optimized servers," said Jeff Clarke, vice chairman and chief operating officer of Dell. "We generated $12.1 billion in AI orders this quarter alone, surpassing the entirety of shipments in all of FY25 and leaving us with $14.4 billion in backlog." Guidance: Dell expects second-quarter revenue to be between $28.5 billion and $29.5 billion. The company anticipates second-quarter adjusted earnings of $2.25 per share. Dell expects fiscal 2026 revenue of $101 billion to $105 billion and full-year adjusted earnings of $9.40 per share. Dell's management team will hold a conference call at 4:30 p.m. ET to further discuss the quarter with investors and analysts. DELL Price Action: Dell shares were up 4.16% in Thursday's after-hours session, trading at $113.63 at the time of publication, according to Benzinga Pro. Read Next: Nvidia Stock Has 'Significant Upside' As AI 'Godfather' Jensen Huang Delivers Another 'Robust Quarter' Photo: Gabriel Pahontu/Shutterstock. DELLDell Technologies Inc$118.003.72%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum21.70Growth83.49QualityNot AvailableValue36.14Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Dell COO Jeff Clarke: 'Unprecedented Demand' For AI Spurs Record First Quarter Server Sales

Consumer PC sales dropped 19 percent year over year, however, and Clarke said the PC refresh is lagging previous refresh cycles. Dell Technologies reported "unprecedented demand" for servers in its first quarter with $6.3 billion in server revenue - up 16 percent year over year - setting a new first-quarter record for server sales. That helped fuel an overall 5 percent increase in company revenue for the fiscal 2026 first quarter ended May 2. "This quarter we executed very well, achieving growth across our core markets and experiencing unprecedented demand for our AI optimized servers," said Jeff Clarke, vice chairman and chief operating officer, during the first quarter earnings call Thursday. "We generated $12.1 billion in AI orders this quarter alone, surpassing the entirety of shipments in all of FY25 and leaving us with $14.4 billion in backlog." [RELATED: Michael Dell's Boldest AI Predictions From Dell Technologies World 2025] The company expects to ship $15 billion in AI servers this year. It shipped $1.8 billion worth of AI servers during the first quarter. But Clarke (pictured) said the road ahead is "lumpy and non-linear." "The customer deployments that we have in front of us are large. They're complex. They have very detailed schedule deliveries. There's lots of dependencies on this," he said. "We've talked about this business being lumpy and nonlinear. The dependencies in this business are waiting for data centers to be built, power to be provided, directly with cool infrastructure putting in place. We're orchestrating a highly complex supply chain." The number of enterprise customers grew quarter over quarter across industry verticals including financial services, manufacturing, media, entertainment and education, Clarke said. And in AI servers, the company's enterprise business is growing faster than its cloud service provider (CSP) business, he said. "Our execution continues to be a key differentiator," Clarke said during the call. "We built a strong reputation for deploying large-scale clusters quickly and reliably, significantly reducing the time to first token and accelerating time-to-value for our customers. Beyond deployment, we provide ongoing comprehensive support, including managed services that ensure systems reliability and performance in customer data centers." Dell PC sales also grew during the quarter with revenue up 5 percent year over year to $12.5 billion as sales of the company's commercial PC's surged 9 percent year over year to $11 billion. Consumer PC sales dropped 19 percent year over year, however, and Clarke said the PC refresh is lagging previous refresh cycles. Dell CFO Yvonne McGill said that while Dell saw strong demand for "richly configured, AI-ready devices" among small and mid-size businesses and large enterprise customers, the consumer market is not biting. "In consumer, the demand environment remains soft and profitability remains challenged. We are focused on executing within CSG [Client Solutions Group], leveraging our leading go-to-market engine and broader portfolio of offerings to capture the PC refresh," she said during the earnings call. "All of our core businesses grew as we reached $23.4 billion in revenue in our first quarter, and non-GAAP EPS grew three times faster than revenue," McGill said. "We generated record first-quarter cash flow from operations of $2.8 billion and returned $2.4 billion to shareholders, more than double our quarterly average since we started our capital allocation program in FY23." McGill said the Round Rock, Texas-headquartered company still expects annual sales for all of fiscal 2026 to come in between $101 billion and $105 billion. For the second quarter Dell expects revenue to come in between $28.5 and $29.5 billion, which would represent a 16 percent year-over-year gain. For the fiscal 2026 first quarter (ended May 2, 2025) Dell reported revenue of $23.38 billion up 5 percent from $22.24 billion in the first quarter of fiscal 2025. Net income for the quarter was $965 million, down 3 percent from $992 million one year earlier.

Dell Wins Wall Street Praise After $12 Billion AI Server Orders, Solid Commercial PC Demand - Dell Technologies (NYSE:DELL)

Wall Street analysts raised their price targets on Dell Technologies DELL on Friday after the company reported its first-quarter results on Thursday. Dell reported first-quarter revenue of $23.38 billion, up 5%, beating the consensus estimate of $23.14 billion. The company reported adjusted earnings of $1.55 per share, missing analyst estimates of $1.69 per share. Also Read: Dell, Nvidia To Build Next-Gen Supercomputer For US Energy Department Dell expects second-quarter revenue of $28.5 billion-$29.5 billion. The company anticipates second-quarter adjusted earnings of $2.25. Dell expects fiscal 2026 revenue of $101 billion-$105 billion and full-year adjusted earnings of $9.40 per share. Goldman Sachs analyst Michael Ng maintained a Buy rating on Dell Technologies and raised the price target from $95 to $130. BofA Securities analyst Wamsi Mohan reiterated a Buy rating on Dell Technologies and raised the price target from $150 to $155. Goldman Sachs: AI server momentum and buybacks offset EPS miss and fiscal 2026 EBIT outlook cut on traditional servers, storage, and PCs, as per Ng. Dell's first-quarter EPS and EBIT missed on worse-than-expected ISG profits, and the company lowered its fiscal 2026 EBIT outlook to $9.1 billion-$9.5 billion (versus $9.2 billion-$9.6 billion prior) on slower market growth assumptions across traditional servers, PCs, and storage, he noted. However, AI server KPIs were much better than expected, with Dell delivering a record $12.1 billion of AI server orders (versus Ng's estimate of $7.2 billion), of which ~$7 billion should translate into revenue in the second quarter, the analyst said. Ng noted that the 5-quarter AI server pipeline increased Q/Q, remains several multiples of the backlog, and includes many sovereign, AI cloud, and enterprise opportunities. The analyst said ISG margins of 9.7% were missed (versus Ng estimate 10.8%) but were primarily related to traditional server customers and geographic mix (i.e., more large customers, less North America exposure) with no issues around AI server margins. Despite investor concerns on PC margins, CSG EBIT was in-line and the outlook was better-than-feared with Dell seeing deflationary commodity costs inclusive of tariffs, Ng noted. Despite Dell's fiscal 2026 EBIT guidance cut, it raised its EPS guidance by $0.10 to $9.15-$9.65 (versus $9.05-$9.55 prior) on better buybacks, the analyst said. Ng's fiscal 2026 revenue and EPS move to $108.3 billion and $9.30, from $102.8 billion and $9.13. BofA Securities: Dell reported that first-quarter revenue beat expectations. Still, Mohan noted that EPS came in at the low end of the guide due to modest tariff impacts on CSG margins and slightly weaker growth from ISS. The analyst said the second-quarter guide far exceeded Street expectations due to an incremental $5 billion in revenue from AI servers. At the highest level, he noted the potential for Dell to deliver significantly higher AI server revenue over the next two years (>$30 billion) with a substantial upside to EPS (>$3). Dell reported CSG segment revenue of $12.5 billion (+4.5% Y/Y), exceeding their guide of ~flat growth Y/Y, the analyst said. Management noted they saw strong demand growth across SMB and enterprise customers, Mohan said. Commercial far outperformed Consumer, as consumer revenue declined 19% due to competitive industry pricing, he said. Mohan noted that Dell saw a "modest impact" on tariffs in the quarter but was able to absorb the impact and leave pricing unchanged for its customers. Management still expects that PC refresh will occur in fiscal 2026 and should drive low single-digit to mid-single-digit revenue growth in CSG. He said the confidence in PC refresh is due to the abnormal age of the install base and recent indicators for Win 11 upgrades and upgrades to AI PCs. Mohan noted that Dell's AI server backlog stands at $14.4 billion, implying $12.1 billion in AI server orders and $1.8 billion in AI server revenue and shipments in the first quarter. The analyst said that for the second quarter, Dell guided AI server shipments to $7 billion, well above expectations, and increased its fiscal guide to $15 billion-plus (versus just $15 billion prior). He said management is confident in its ability to grow AI server revenue and drive incremental growth in operating profit dollars and cash flows. For the second quarter, Mohan modeled AI server revenue ~in line with the shipment guide of $7 billion (+126% Y/Y, +289% Q/Q), Mohan noted. Mohan's fiscal 2026 revenue and EPS move to $105.0 billion and $9.40, from $103.2 billion and $9.16. Price Actions: DELL stock is trading lower by 1.8% to $111.57 at last check Friday. Read Next: Dell, Hewlett Packard, Super Micro Set To Benefit From Nvidia's AI Chip Ramp Photo: Gabriel Pahontu/Shutterstock DELLDell Technologies Inc$111.42-1.95%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum23.10Growth83.52QualityNot AvailableValue36.57Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Dell's AI Server Orders Hit Record $12.1 Billion In Q1, Backlog Swells To $14.4 Billion: 'Exceptionally Strong Demand' - Invesco QQQ Trust, Series 1 (NASDAQ:QQQ), Dell Technologies (NYSE:DELL)

Dell Technologies Inc. DELL reported a mixed first quarter, driven by what executives described as "exceptionally strong demand" for its AI-optimized servers. What Happened: The company reported $12.1 billion in AI server orders in the first quarter of the fiscal year 2026, surpassing the entirety of shipments for all of fiscal year 2025, and pushing its backlog to a record $14.4 billion. Vice Chairman and COO Jeff Clarke noted that just 91 days into the year, Dell had already secured $12.1 billion in AI server orders, a figure that significantly contributed to the burgeoning $14.4 billion backlog. Looking ahead, Dell anticipates shipping approximately $7 billion of that backlog in the second quarter. Clarke emphasized the company's focus on actively converting its extensive "five-quarter pipeline" into new orders throughout the second quarter and the latter half of the year. He projected a strong performance, stating that their "best outlook" suggests they will be in the "$15 billion plus" range for shipped AI server revenue for the full fiscal year. See Also: Trump's Tariff Refund Could Cost US $10 Billion With 2% Month-End Rebalance Impact On Equities In Case Of An Appeal: 'Uncertainty Is Back Front And Center' Why It Matters: Its first-quarter revenue of $23.38 billion beat the consensus estimate of $23.14 billion. Whereas, adjusted earnings of $1.55 per share missed analyst estimates of $1.69 per share. The company's revenue growth was fueled by robust performance across all core markets, with both the Infrastructure Solutions Group (ISG) and Client Solutions Group (CSG) growing by 8%. Dell also generated a record $2.8 billion in cash flow from operations for the first quarter and returned a substantial $2.4 billion to shareholders through stock repurchases and dividends. The second-quarter revenue is expected to range from $28.5 billion to $29.5 billion, whereas the expected EPS stands at $2.25. The fiscal 2026 revenue is expected to be between $101 billion to $105 billion with a full-year EPS of $9.40. Dell shares fell 0.12% on Thursday and rose 1.87% in after-hours. The stock was down 2.49% in 2025 and 33.13% over the whole year. Benzinga Edge Stock Rankings shows that Dell had a stronger price trend over the short, medium, and long term. Its momentum ranking was poor, and its value ranking was moderate at the 36.14th percentile. The details of other metrics are available here. The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, rose on Thursday. The SPY was up 0.39% to $590.05, while the QQQ advanced 0.20% to $519.93, according to Benzinga Pro data. On Friday, the futures of the S&P 500, Dow Jones, and Nasdaq 100 indices were trading lower. Read Next: Stock Market Is Pricing A Never-Before-Seen 'Divergence' As Equities And Bonds 'Run It Hot' Amid Gloomy Outlook By Bottom-Up Analysts Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: mrinalpal / Shutterstock.com DELLDell Technologies Inc$115.942.03%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum23.10Growth83.52QualityNot AvailableValue36.57Price TrendShortMediumLongOverviewQQQInvesco QQQ Trust, Series 1$519.34-0.11%SPYSPDR S&P 500$589.54-0.09%Market News and Data brought to you by Benzinga APIs

Goldman Sachs maintains buy on Dell stock with $130 target By Investing.com

On Friday, Goldman Sachs (NYSE:GS) reiterated its Buy rating on Dell Technologies Inc. (NYSE:DELL), with a steady price target of $130.00. The firm's analyst cited the strength in AI server orders and share buybacks as key factors that counterbalance a miss in earnings per share (EPS) and a reduced earnings before interest and taxes (EBIT) outlook for fiscal year 2026. Currently trading at $113.63, Dell maintains a strong "Buy" consensus among analysts, with targets ranging from $91 to $150. According to InvestingPro analysis, the stock appears slightly undervalued based on its Fair Value calculation. Dell's first-quarter fiscal 2026 EPS and EBIT fell short of expectations due to lower-than-anticipated profits in its Infrastructure Solutions Group (ISG). The company also revised its fiscal 2026 EBIT forecast downward from the previously estimated range of $9.2-$9.6 billion to a new range of $9.1-$9.5 billion. This adjustment was attributed to slower market growth projections for traditional servers, personal computers (PCs), and storage solutions. Despite these challenges, InvestingPro data shows Dell maintains robust revenue of $95.57 billion over the last twelve months, with a revenue growth rate of 8.08%. Despite the downward revision in EBIT outlook, Dell reported a record $12.1 billion in AI server orders, which was significantly higher than Goldman Sachs' estimate of $7.2 billion. Approximately $7 billion of these orders are expected to convert to revenue in the second quarter of fiscal 2026. The AI server pipeline has grown quarter-over-quarter and includes a variety of opportunities from sovereign entities, including those in the Middle East, AI cloud services, and enterprise clients. The ISG margins came in at 9.7%, below the 10.8% Goldman Sachs had anticipated, primarily due to a mix of traditional server customers and geographic distribution that favored larger customers and less exposure to North America. However, the shortfall in margins did not extend to AI server margins. Contrary to concerns about PC margins following the second-quarter fiscal 2025 results from HP Inc. (NYSE:HPQ), Dell's Client Solutions Group (CSG) EBIT aligned with expectations, and the outlook was more positive than anticipated. Dell is experiencing deflationary commodity costs, including tariffs on CPUs, DRAM, and displays. In a display of confidence in its stock, Dell executed a record $1.98 billion in share buybacks, purchasing 22.1 million shares at an average price of $90 per share. Despite the cut in EBIT guidance for fiscal 2026, Dell raised its EPS guidance for the same period by $0.10, now projecting $9.15-$9.65, up from the previous range of $9.05-$9.55, due to the impact of the aggressive buyback strategy. In other recent news, Dell Technologies Inc. has seen a series of updates from financial analysts following its first-quarter fiscal year 2026 report. The company reported a significant increase in its artificial intelligence (AI) server backlog, reaching $14.4 billion, with $12.1 billion in orders during the quarter. Despite these impressive figures, Dell's overall outlook remains cautious due to softer traditional enterprise demand. JPMorgan (NYSE:JPM) raised its price target for Dell to $125, maintaining an Overweight rating, while Raymond (NSE:RYMD) James increased its target to $150, citing strong AI server revenue guidance. BofA Securities also raised Dell's price target to $155, maintaining a Buy rating, and highlighted the potential for over $30 billion in AI server revenues over the next two years. Barclays (LON:BARC) increased its target to $123, maintaining an Equalweight rating, noting challenges in converting AI orders into revenues due to delays in rack scale deployments. Morgan Stanley (NYSE:MS) adjusted its price target to $135, keeping an Overweight rating, and pointed out Dell's robust performance in gaining market share in traditional enterprise markets. Despite the positive outlooks, analysts remain cautious about the competitive landscape in the AI server market and potential pressures on profitability.

Dell raises annual profit forecast on strong AI server demand

(Reuters) -Dell raised its annual profit forecast on Thursday, signaling growing demand for its AI-powered servers that are equipped with Nvidia's powerful chips. Shares of the company, whose servers are used by customers such as Elon Musk's AI startup xAI and CoreWeave, rose 2% in extended trading. Dell and Super Micro Computer have benefited from growing demand for such servers, but the high cost of producing them and tough competition have pressured margins. "We generated $12.1 billion in AI orders this quarter alone, surpassing the entirety of shipments in all of fiscal 2025 and leaving us with $14.4 billion in backlog," Dell's Chief Operating Officer Jeff Clarke said. The results follow the U.S. Department of Energy's announcement on Thursday that it would launch a new supercomputer, named Doudna, which will use Dell and Nvidia's advanced technology to perform complex computing tasks. Dell now expects annual adjusted profit to be $9.40 per share, compared with its prior forecast of $9.30 per share. The company also reiterated its annual revenue outlook. It forecast second-quarter revenue to be between $28.5 billion and $29.5 billion, above analysts' average estimate of $25.05 billion, according to data compiled by LSEG. Dell's adjusted profit forecast for the second quarter of $2.25 per share was also above estimates of $2.09. The company's first-quarter revenue of $23.38 billion beat expectations of $23.14 billion, while its adjusted profit of $1.55 per share missed estimates of $1.69. "We note potential near-term margin pressure from competitive pricing, tariffs, and geographic mix shifts," Shreya Gheewala, equity analyst at CFRA Research, said. Revenue from Dell's infrastructure solutions group, which includes storage, software and server offerings, rose 12%, while revenue from its client solutions group, that houses its PC business, rose 5%. PC refresh cycle is slower than before, but signs show users are moving to Windows 11 PCs, which include AI PCs, Clarke added. (Reporting by Jaspreet Singh in Bengaluru; Editing by Shounak Dasgupta)