Dell Raises Forecast as Demand for Artificial Intelligence Infrastructure Surges

2026-09-02 companies

Round Rock, Wednesday, 2 September 2026.
Dell raised its annual revenue outlook to $192 billion after artificial intelligence server demand drove its order backlog to a record $95 billion.

Market Reaction to Guidance

Dell Technologies (NYSE: DELL) shares surged following the announcement on 1 September 2026, with stock prices jumping 9% in regular trading [1]. The hardware manufacturer raised its fiscal 2027 revenue guidance to $192 billion, a significant increase from previous expectations [3][5]. This move reflects accelerating enterprise demand for artificial intelligence infrastructure and sustained capital expenditure across corporate IT departments [1].

Quarterly Financial Details

For the fiscal second quarter ended 31 July 2026, Dell reported total revenue of $46.97 billion, representing a 58% year-over-year increase [1][5]. Adjusted earnings per share reached $7.04, exceeding Wall Street expectations of $4.92 [4][5]. The Infrastructure Solutions Group was a primary driver, reporting revenue of $31.78 billion, up 89% from the prior year period [1][4].

AI Infrastructure Demand

AI-optimized server revenue hit $16.4 billion in the quarter, doubling from a year ago [3][5]. This segment is projected to reach $74 billion in sales for the full fiscal year 2027, representing 200% growth [4][5]. Jeff Clarke, Chief Operating Officer, noted that customers require meaningful CPU compute capacity to support AI and agentic workflows [1].

Backlog Growth Analysis

The company’s AI server backlog grew to $95 billion exiting the quarter, up from $51.3 billion in the first quarter [2][4]. This represents a growth rate of 85.185 percent in backlog value over the period [2][4]. During the quarter, Dell booked $60.9 billion in new AI server orders [2][5].

Future Outlook and Guidance

Looking ahead to the fiscal third quarter, Dell forecasts $49.0 billion in revenue and $6.50 in adjusted earnings per share [1][3]. The full-year fiscal 2027 guidance was raised to $25.50 adjusted EPS, up from previous guidance of $17.90 EPS issued in May 2026 [1]. Management cited climbing input costs as a factor in the elevated revenue guidance [1].

Stock Performance Context

Year-to-date performance shows Dell shares up 236% as of 31 August 2026, significantly outperforming the S&P 500 which gained 11% over the same period [1]. The company’s backlog is now larger than the market cap of many S&P 500 companies [4]. This backlog serves as a forward order book for the entire AI buildout [4].

Strategic Shifts

Dell optimized its resources towards the infrastructure business after seeing signs of PC market softening earlier in the year [1]. The company secured a $9.7 billion U.S. military software contract on 27 May 2026 [1]. Additionally, agreements such as Iren’s purchase of $1.6 billion in Dell hardware highlight the broad demand [1].

Sources

Enterprise technology AI servers