Dell Technologies Shares Rally as Company Forecasts Artificial Intelligence Revenue Will Double

Dell Technologies Shares Rally as Company Forecasts Artificial Intelligence Revenue Will Double

2026-02-27 companies

Round Rock, Friday, 27 February 2026.
Dell shares surged over 10% after the company projected AI server revenue will double to $50 billion in fiscal 2027. Driven by a record $43 billion backlog, this outlook confirms robust, sustained demand for critical data center infrastructure.

Dell Technologies Shares Rally as Company Forecasts Artificial Intelligence Revenue Will Double

Investors questioning the durability of the AI hardware boom received a definitive answer this morning. Following our previous coverage on the critical test facing Dell’s earnings, the company has signaled that demand is accelerating rather than slowing. Dell Technologies (DELL) shares surged 11% in pre-market trading to $135.17 [1], driven by a forecast that revenue from AI servers will double in fiscal 2027 [1]. This projection has effectively reset expectations for the sector, confirming that the appetite for data center infrastructure remains voracious.

Infrastructure Group Drives Record Performance

The catalyst for today’s rally lies in the company’s fiscal fourth-quarter results, where revenue rose 39% year-over-year to $33.38 billion [4][7]. This growth was overwhelmingly fueled by the Infrastructure Solutions Group (ISG), which saw revenue climb 73% to $19.6 billion [4][5]. Within this segment, the demand for AI-capable systems has been substantial; Dell closed more than $64 billion in AI-optimized server orders and shipped over $25 billion worth of these units throughout the fiscal year [3][5]. These figures underscore a rapid shift in enterprise spending priorities toward high-performance computing.

A $50 Billion AI Horizon

Looking ahead, the company’s guidance suggests the infrastructure investment cycle is far from over. Dell exited fiscal 2026 with a record AI backlog of $43 billion, providing high visibility into future revenue streams [2][5]. Management has outlined a target of $50 billion in AI revenue for fiscal 2027, which would represent a doubling of the segment’s performance compared to the prior year [2][5]. Consequently, the company raised its total revenue outlook to a range of $138 billion to $142 billion, a projection that significantly outpaces previous Wall Street estimates of $125 billion [4][8].

Capital Allocation and Market Confidence

In a move demonstrating confidence in its free cash flow generation, Dell also announced expanded returns for shareholders. The board approved a 20% increase in the annual dividend and authorized an additional $10 billion for share repurchases [4][5]. Chief Operating Officer Jeff Clarke described fiscal 2026 as a “defining year,” noting that the company has now expanded its AI server customer base to over 4,000 clients [3][7].

Sources


Artificial Intelligence Server Infrastructure