Dell reported its fastest revenue growth since returning to public markets in 2018, driven by explosive demand for AI servers. The stock surged nearly 39% in extended trading on Thursday, hitting $443.86 in after-hours trading after closing at $317.05.
Revenue came in at $43.84 billion for the quarter ended May 1 — an 88% year-over-year jump that blew past analyst estimates of $35.43 billion. Adjusted EPS of $4.86 was well ahead of the $2.94 Wall Street expected.
The numbers mark the highest growth rate for any quarter since Dell’s 2018 IPO, which itself came five years after the company was taken private. Prior to this, the best growth rate was 39%, recorded just last quarter.
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Net income more than tripled to $3.44 billion, or $5.24 per share, up from $965 million, or $1.37 per share, a year ago.
AI servers were the clear engine behind the results. Revenue from that segment rose 757% from a year ago to $16.1 billion, as customers from hyperscalers to enterprises raced to build out AI infrastructure.
Dell said it now has over 5,000 AI server customers. Orders came in at $24.4 billion for the quarter, and the company ended the period with a backlog of $51.3 billion in AI server orders.
For fiscal 2027, Dell now expects AI server revenue of $60 billion, up from a prior forecast of $50 billion. That would represent roughly 144% growth year over year.
Dell’s Infrastructure Solutions Group — which covers servers and data center equipment — posted a 181% revenue increase to $29 billion. The result cleared the $22.4 billion analyst consensus by a wide margin.
Traditional servers also had a strong quarter. Revenue from CPU-based servers nearly doubled to $8.5 billion. Chief Operating Officer Jeff Clarke noted that semiconductor companies and big tech firms are using those systems to handle inference and agentic workloads.
For Q2, Dell guided for adjusted EPS of $4.80 and revenue of $44–$45 billion. Analysts had penciled in $2.98 EPS and $34.97 billion in revenue.
Full-year guidance for fiscal 2027 was raised to $165–$169 billion in revenue and $17.90 in adjusted EPS. The LSEG consensus was $142.5 billion in revenue and $13.09 EPS.
The company has been dealing with rising input costs. Dell raised prices in January, and Clarke said repricing is happening frequently due to inflation in memory, CPUs, hard drives, and raw materials. He said that pressure is unlikely to ease.
Supply constraints in the back half of fiscal 2027 are expected for memory, standard processors, and hard drives.
On Wednesday, the Pentagon awarded Dell a five-year, $9.7 billion contract to manage Microsoft 365 licenses across the US military. Analysts at Evercore ISI said the deal gives Dell growth exposure beyond the AI server market.
Dell’s PC division, the Client Solutions Group, grew revenue 17% to $14.6 billion, above the $12.8 billion estimate.
As of Thursday’s close, DELL was up more than 150% for the year.
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