Shares of Dell Technologies Inc jumped 14% in intraday trading on Wednesday, 2 September, reaching $484 apiece, after the company reported record revenue and earnings per share for the second fiscal quarter.
The sentiment was further boosted after the Texas-based company raised its annual sales forecast, providing another sign of surging demand for servers used to run artificial intelligence workloads.
AI infrastructure companies have benefited from rising demand as technology firms and hyperscalers ramp up investments in data centres to support large language models and other AI applications. Peer Super Micro Computer also reported upbeat results last month.
Shares of other AI server makers, including Super Micro Computer and Hewlett Packard Enterprise, rose 0.7% and 5.4%, respectively, following Dell’s results.
AI server demand boosts record performance
Dell’s second-quarter revenue jumped 58% to a record $47 billion, surpassing the Wall Street estimate of $44.92 billion. Revenue from Dell’s Infrastructure Solutions Group, which includes its storage, software and server offerings, jumped 89% to $16.4 billion, according to the company’s earnings release.
Sales from traditional servers and networking more than doubled to $10.5 billion as customers upgraded their infrastructure and demand increased for CPU-based servers handling agentic workloads.
Profit, excluding certain items, came in at $7.04 per share, up 203% from $2.30 reported in the same period last year.
Amid the boom in AI demand, Dell is securing contracts for machines equipped with Nvidia Corp’s AI chips, as well as for traditional servers. The equipment also contains central processing units, or CPUs, which have regained momentum because they are useful for tasks such as managing AI agents.
“In our second quarter, we delivered record revenue of $47 billion, record EPS and a record $4.3 billion returned to shareholders,” said David Kennedy, chief financial officer at Dell Technologies.
“IT environments have shifted from cost centres to value drivers that fuel growth and competitive advantage, and customers are investing accordingly – creating opportunity across our portfolio,” said Jeff Clarke, vice chairman and chief operating officer at Dell Technologies.
Clarke further said, “That’s clearest in our AI server business where we booked a record $60.9 billion in orders, recognized a record $16.4 billion in revenue and exited the quarter with a record $95 billion backlog.”
Dell raises AI server revenue forecast
The company, whose shares have more than tripled this year, now expects fiscal 2027 revenue from AI-optimized servers to reach $74 billion, up from its previous projection of $60 billion.
Dell also expects revenue for the fiscal year ending in January 2027 to be about $192 billion, up from its May outlook of approximately $167 billion.
(With inputs from agencies)
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