Dell reported its fastest-paced revenue growth since returning to the public markets more than seven years ago, with sales and profits beating analysts’ expectations. Shares rose as much as 27% in extended trading Thursday.
Here’s how the company performed compared to the LSEG consensus:
Earnings per share: $4.86 adjusted vs. $2.94 expected Revenue: $43.84 billion vs. $35.43 billion expected
Sales for the quarter ended May 1 were up nearly 88% compared to the same period last year, the company said in a statement. Since its IPO in 2018, five years after the server maker went private, it has never seen year-over-year growth above 39%, which was recorded in January.
This expansion is powered by artificial intelligence, and Dell is assembling servers with graphics processing units such as: Nvidia. According to Dell, AI server sales rose 757% year over year to $16.1 billion. For the full year, Dell expects AI revenue to be $60 billion, up from its February estimate of $50 billion. This would reflect a growth of 144%.
Dell said it has more than 5,000 AI Server customers, including neocloud, sovereign clients and enterprises.
As of Thursday’s close, Dell’s stock price had risen more than 150% since the beginning of the year, compared with about 10% for the S&P 500.
One of the big winners in Dell’s popularity is President Donald Trump, who became a shareholder in the first quarter, according to a U.S. government ethics report. At a White House event earlier this month, President Trump said, “Go buy a Dell.”
On Wednesday, the Department of Defense announced it had signed a five-year contract with Dell worth $9.7 billion. microsoft 365 Productivity Services. This comes about five months after Dell CEO Michael Dell and his wife Susan Dell donated $6.25 billion to fund Trump accounts for 25 million children in the United States.
Dell said its net income for the latest quarter more than tripled to $3.44 billion, or $5.24 per share, from $965 million, or $1.37 per share, a year earlier. Dell raised prices in January to reflect higher input costs due to a global memory shortage caused by the AI boom.
Jeff Clark, Dell’s vice chairman and executive director, said on a conference call with analysts that the company faces “significant product constraints, particularly in DRAM and NAND.”
For the fiscal second quarter, Dell is targeting adjusted earnings per share of $4.80 on revenue of $44 billion to $45 billion. Analysts polled by LSEG had expected earnings of $2.98 per share and revenue of $34.97 billion.
Dell has revised its fiscal 2027 guidance upwards, expecting adjusted earnings per share of $17.90 and revenue of $165 billion to $169 billion, representing 47% growth at the midpoint of the range. Analysts surveyed by LSEG had expected earnings of $13.09 per share and revenue of $142.5 billion.
Revenue from Dell’s Infrastructure Solutions group, which covers servers and other data center equipment, rose 181% to $29 billion, well above the StreetAccount consensus of $22.4 billion. Growth accelerated across AI servers, traditional servers, and network equipment.
Clark said growth in traditional server sales increased significantly.
“Think about semiconductor companies and large technology companies using this to actually drive some of their inference workloads and agent workloads in their environments,” he said.
Clark said Dell expects supply constraints to occur in the second half of fiscal 2027.
The Client Solutions group, which includes consumer and business PCs and accessories, saw revenue increase 17% to $14.6 billion, beating the StreetAccount consensus of $12.8 billion. During this quarter, Dell introduced new laptops and workstations for business customers.
WATCH: Dell wins 5-year software contract with Department of Defense, moves closer to breaking record
