On May 29, Dell Technologies (DELL) released its fiscal first-quarter report for fiscal year 2027, showcasing strong performance. Quarterly revenue reached $43.8 billion, an 88% year-over-year increase; earnings per share were $4.86, up 214% year-over-year, both setting historical records. The company’s stock surged 38% in after-hours trading.
AI server revenue for the quarter skyrocketed 757% year-over-year to $16.1 billion, with total AI orders for the single quarter reaching $24.4 billion and a backlog of $51.3 billion. Based on this, Dell significantly raised its full-year AI server revenue guidance to $60 billion, and the midpoint of its total annual revenue guidance jumped to $167 billion.
Dell’s Chief Operating Officer, Jeff Clarke, stated bluntly on the conference call: “All four of our major businesses — PCs, servers, storage, and AI servers — are taking share. We are winning.” Data shows that the Infrastructure Solutions Group, which includes servers, networking, and storage, saw total revenue surge 181% to $29 billion. Within this, traditional server and networking revenue grew 92% year-over-year to $8.5 billion, while storage revenue rose 8% to $4.3 billion. The Client Solutions Group, encompassing commercial and consumer PCs, saw revenue increase 17% year-over-year to $14.6 billion, with commercial PC revenue growing 18%, marking the seventh consecutive quarter of growth.
Despite the surge in demand, Dell faces supply constraints. Clarke made it clear: “This is not a demand problem; it’s a supply problem.” The company faces four major shortages in its supply chain, ranked by severity: DRAM (memory) > NAND (flash) > CPU (processors) > hard drives. The company is “repricing almost daily,” and memory is currently the most significant bottleneck. Many large customers have begun signing three- to five-year long-term purchase agreements to secure future supply.
Traditional server revenue jumped 92% year-over-year, the most surprising highlight of this earnings report. Clarke explained that AI is transforming from a “consultant” to an “operator” — AI agents require a large number of CPUs to manage every call and state maintenance, creating incremental demand for traditional computing. He admitted, “I didn’t know this last October. This is a brand-new market.”
Based on the exceptionally strong first quarter, Dell raised the midpoint of its full-year revenue guidance to $167 billion, representing approximately 50% year-over-year growth. The full-year AI server revenue target is $60 billion, roughly 2.4 times that of the previous year. Traditional servers are expected to grow over 60% for the full year. Full-year non-GAAP earnings per share guidance is $17.90, an increase of approximately 75% year-over-year.
