Dell Technologies, which has transformed itself from a PC maker into an AI server company, posted results that far exceeded market estimates on surging demand for AI infrastructure. The company also sharply raised its annual outlook, and its shares jumped more than 8% in after-hours trading following the earnings release.
Dell said revenue for the second quarter of fiscal 2027, covering May through July 2026, came in at $46.971 billion, or about 65 trillion won, according to CNBC and other outlets on the 1st. That was up 58% from a year earlier and well above the consensus estimate of $44.89 billion compiled by FactSet. Adjusted non-GAAP earnings per share came in at $7.04, up 203% and above the $4.91 analysts had expected.
The results stand out because the infrastructure business improved in both scale and profitability, led by AI servers. Revenue at the Infrastructure Solutions Group, which handles that business, rose 89% to $31.782 billion. Within that, sales of AI-optimized servers doubled from a year earlier to $16.401 billion. The unit's operating margin climbed to 15%, indicating that the AI server business is contributing not only to revenue growth but also to margin improvement.
Growth also spread across the broader data center business. Revenue from traditional servers and networking equipment rose 122% to $10.531 billion, while storage revenue climbed 26% to $4.85 billion. "More customers need substantial CPU compute capacity to support AI and agentic workflows," Dell Chief Operating Officer Jeff Clarke said. "These workloads are creating additional demand for traditional servers."
Order momentum remained solid. New AI server orders reached a record $60.9 billion in the quarter, and the backlog at the end of the period swelled to $95 billion, pointing to further expansion in AI-related revenue.
On the strength of those results, Dell sharply raised its outlook. It expects third-quarter revenue of $49 billion and adjusted EPS of $6.50, well above consensus estimates of $41.42 billion in revenue and $4.49 in EPS. The company lifted its annual revenue guidance to $192 billion from a previous range of $165 billion to $169 billion, and raised its adjusted EPS forecast to $25.50 from $17.90.
The market welcomed the results. Dell shares fell 6.80% in the regular session but rose more than 8% in after-hours trading after the earnings release. The stock has gained 236% so far this year, far outpacing the 11% rise in the S&P 500, the benchmark U.S. index, over the same period.
Chairman and founder Michael Dell wrote on X after the release that there is an old Texas saying that when earnings per share keep growing more than 200% year over year, something good is about to happen — adding that he may have just made it up.
