Dell raises fiscal 2027 outlook after revenue growth accelerates on AI server demand

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Dell raises 2027 outlook on AI

Highlights

Dell's quarterly revenue surges 88% to $43.84 billion and adjusted EPS hits $4.86, topping LSEG estimates and fueling post-market stock gains.
Dell boosts fiscal 2027 outlook to $17.90 adjusted EPS and $165–169 billion revenue, implying 47% midpoint growth, surpassing analyst forecasts.
AI server revenue skyrockets 757% to $16.1 billion, prompting Dell to raise full-year AI revenue guidance to $60 billion from February's $50 billion target.

Quarter results and upgraded outlook

As reported by CNBC, Dell says quarterly revenue rises 88% from a year earlier to $43.84 billion in the period ended May 1, while adjusted earnings per share come in at $4.86, both above LSEG consensus estimates of $35.43 billion in revenue and $2.94 per share. The company says this is its fastest revenue growth for any period since its 2018 return to the public market, and its stock rises in extended trading on Thursday.

Net income more than triples to $3.44 billion, or $5.24 per share, from $965 million, or $1.37 per share, a year earlier. For the fiscal second quarter, Dell is targeting adjusted earnings per share of $4.80 on revenue of $44 billion to $45 billion, ahead of analysts' expectations for $2.98 per share and $34.97 billion in revenue.

Dell also raises its fiscal 2027 forecast and now expects adjusted earnings per share of $17.90, with revenue between $165 billion and $169 billion. That implies growth of 47% at the midpoint, above LSEG estimates of $13.09 per share on $142.5 billion in revenue.

AI servers drive business momentum

Expansion is being driven by artificial intelligence, with Dell assembling servers containing graphics processing units from suppliers such as Nvidia. Dell says AI server revenue jumps 757% from a year earlier to $16.1 billion, and it lifts its full-year AI revenue target to $60 billion from the $50 billion projection it gave in February.

Revenue from the Infrastructure Solutions Group, which includes servers and other data center equipment, climbs 181% to $29 billion, well above StreetAccount's $22.4 billion consensus, as growth accelerates across AI servers as well as traditional servers and networking gear. The Client Solutions Group, covering consumer and commercial PCs and accessories, posts a 17% revenue increase to $14.6 billion, also ahead of StreetAccount's $12.8 billion estimate, after Dell announces new laptops and workstations for business customers during the quarter.

Earlier in the year, Dell raises prices to reflect higher input costs tied to a global memory shortage linked to the AI boom. Separate developments also draw attention to the company, including a Pentagon announcement on Wednesday of a five-year Dell contract worth $9.7 billion for Microsoft 365 productivity services, while U.S. government ethics filings show President Donald Trump becomes a shareholder in the first quarter.

In our earlier analysis of Super Micro Computer (SMCI), we highlighted how AI server demand was strengthening the company’s outlook, supported by new partnerships to deploy NVIDIA GPU-accelerated systems in Europe. We also noted that despite the bullish trend, technical indicators were flashing overbought conditions, making near-term consolidation and key resistance/support levels important for traders to watch.

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