Dell Technologies has raised its profit forecast for the year thanks to a massive jump in AI server demand.
The Texas-based company now expects about $9.40 per share for the fiscal year ending January 2026. That’s higher than its earlier estimate and more than what analysts predicted.
Dell is making a stunning bet on the future of computing, throwing a mountain of cash at the future of artificial intelligence and big tech collaborations.
And that sharp reversal is driving, in part, a surging AI market. In the past quarter alone, the tech firm posted $12.1 billion in orders for AI servers. That is more than it shipped in all of the previous fiscal year.
According to Dell COO Jeff Clarke, the demand isn’t showing much sign of slowing. The company is sitting on a $14.4 billion AI backlog, indicating more revenue will come to fruition in subsequent quarters.
Clarke described it as an “unprecedented demand” from customers building large and complex AI systems. He added that some delays in delivering systems are simply waiting for new data centers, power, and cooling to go online.
Sales grow as Dell taps into AI gold rush
For the three months ended May 2, Dell reported $23.4 billion in revenue, a 5% increase from the comparable period a year earlier. That was more than the $23.1 billion average estimate of Wall Street analysts.
Earnings, adjusted for one-time gains and costs, came to $1.55 per share, which fell short of the $1.69 per share analysts surveyed by Zacks Investment Research expected. The company said it was pleased with its performance and bullish that future quarters would be even better.
Dell’s earnings per share and revenue for the current quarter, $2.25 and $29 billion, surpass average market estimates.
The increase in AI server orders has been driven by leading customers such as Elon Musk’s xAI and CoreWeave, who use Dell’s high-end servers in growing data centers.
The tech firm has been buying back many shares as part of a share repurchase program to add to shareholder value. This reduces the number of shares in circulation, effectively increasing earnings per share.
Dell builds flagship supercomputer with Nvidia
In a separate huge victory, Dell has partnered with the chipmaker Nvidia to construct a next-generation supercomputer for the U.S. Department of Energy. Based at the Lawrence Berkeley National Laboratory, the system will fulfill the most advanced research requirements, from fusion energy to biomolecular modeling, materials design, and even fundamental physics.
This move further cements Dell as a key AI and high-performance computing player.
Still, challenges remain. AI server sales, which show much promise, are what Clarke referred to as “lumpy.”
Outside AI, the consumer PC market continues to woes. In the three months until the end of June, Dell’s consumer PC revenues dropped 19%. Its operating income in that unit — consumer and business machines — fell 16%.
Economic uncertainty and persistent tariffs from the United States also hamper parts of the tech industry. On Thursday, HP Inc., a Dell competitor, had its stock drop 8.3% after reducing its profit forecast because of tariffs and slow demand.
Curiously, that same day, a United States court panel concluded that most tariffs during the Trump administration ran afoul of the law, despite which they remain in place while the legal process continues.
Dell noted that its updated full-year guidance takes into account everything currently known about these tariffs.
