Dell Technologies (DELL) reported fiscal second-quarter results on Tuesday that crushed Wall Street expectations, with revenue and profit soaring on relentless demand for artificial intelligence infrastructure. The company also raised its full-year outlook, sending shares up 9% in extended trading.
For the quarter ended July 31, Dell posted adjusted earnings per share of $7.04, well above the $4.92 analysts had expected. Revenue climbed 58% year over year to $46.97 billion, also ahead of the $44.92 billion consensus. Net income surged to $4.13 billion, or $6.34 per share, from $1.16 billion, or $1.70 per share, a year earlier. Adjusted earnings exclude stock-based compensation.
Dell issued third-quarter guidance of $6.50 in adjusted earnings per share on $49.0 billion in revenue, implying 81% growth. Analysts had forecast $4.49 per share and $41.42 billion. The company also sharply raised its full-year outlook, now projecting adjusted earnings per share of $25.50 on revenue of $192 billion. Wall Street had been looking for $18.92 per share and $172.67 billion. In May, Dell’s fiscal 2027 guidance called for adjusted earnings per share of $17.90 and revenue between $165 billion and $169 billion.
Jeff Clarke, Dell’s operating chief, said on a conference call that price increases driven by rising input costs contributed to the higher revenue guidance.
The Infrastructure Solutions Group, which targets data center hardware, generated $31.78 billion in fiscal second-quarter revenue, up 89% and above the $29.61 billion consensus. AI-optimized servers accounted for $16.40 billion of that total, exceeding the $16.07 billion estimate. AI server orders reached $60.9 billion during the quarter, while backlog hit a record $95 billion, up eightfold from a year earlier. Storage revenue rose nearly 26% to $4.85 billion, and traditional server and networking revenue jumped 122% to $10.53 billion.
“We are seeing a growing trend of customers that require meaningful CPU compute capacity to support AI and agentic workflows,” Clarke said. “These workloads are creating incremental demand for traditional servers.”
The Client Solutions Group, which sells PCs and accessories, posted revenue of $15.03 billion, up 20% but slightly below the $15.08 billion consensus. Clarke said the company saw signs of PC market softening in the second half earlier this year and shifted resources toward the infrastructure business.
During the quarter, Dell received a $9.7 billion contract to provide software to the U.S. military. AI cloud infrastructure provider Iren agreed to buy $1.6 billion in Dell hardware, including servers containing Nvidia chips.
For the full fiscal year, Dell now expects AI-optimized server sales of $74 billion, representing 200% growth. Just six months ago, the company had forecast 103% growth for the year.
After the results were released, founder, chairman and CEO Michael Dell posted on X: “There’s an old Texas saying I may have just made up… If you keep growing EPS 200%+ y/y something good will happen.” Bloomberg calculations rank Michael Dell as the world’s fifth-richest person.
As of Tuesday’s close, Dell shares had risen 236% year to date, compared with an 11% gain for the S&P 500. The stock has become a popular way for investors to bet on the continued expansion of AI infrastructure. In July, President Trump again recommended buying Dell computers; he has held Dell shares since returning to office last year.
