Dell Shares Surge 39% After AI Server Revenue Jumps 757% in Fiscal First Quarter

Dell Technologies reported its fastest pace of revenue growth since returning to the public market in 2018, posting an 88% year-over-year increase in quarterly sales and handily beating analyst expectations, sending shares climbing as much as 39% in extended trading Thursday.

The company reported adjusted earnings of $4.86 per share on revenue of $43.84 billion for the quarter ended May 1, well above the LSEG consensus estimates of $2.94 per share and $35.43 billion in revenue.

AI server sales were the primary engine of growth, rising 757% from a year earlier to $16.1 billion. Dell said it now counts more than 5,000 AI server customers, spanning neoclouds, sovereign clients, and enterprises.

Dell assembles servers incorporating graphics processing units from chipmakers including Nvidia, positioning it as a major beneficiary of the infrastructure buildout underpinning artificial intelligence workloads.

Revenue from Dell's Infrastructure Solutions Group — which covers servers and other data center equipment — climbed 181% to $29 billion, surpassing the StreetAccount consensus of $22.4 billion. Growth accelerated across both AI servers and traditional servers and networking gear.

The company raised its full-year AI revenue forecast to $60 billion, up from a projection of $50 billion issued in February, which would represent 144% year-over-year growth.

Net income more than tripled in the quarter to $3.44 billion, or $5.24 per share, compared with $965 million, or $1.37 per share, a year earlier.

Rising input costs tied to the global memory shortage are pushing Dell to reprice products with unusual frequency. "We're repricing, it feels like, every day, and I'm sure our customers feel that pain," Jeff Clarke, Dell's vice chairman and operating chief, said on a conference call with analysts. "Unfortunately, I don't see that changing, given the world that we're living in today, where you have an inflationary environment, whether it's fuel, whether it's raw materials, whether that's DRAM, whether that's NAND, CPUs."

Clarke also flagged supply constraints expected in the second half of fiscal 2027, citing shortages across memory, standard processors, hard drives, and other components.

Dell's Client Solutions Group, covering consumer and business PCs and accessories, posted a 17% revenue increase to $14.6 billion, above the $12.8 billion StreetAccount estimate.

For the fiscal second quarter, Dell is targeting adjusted earnings of $4.80 per share on revenue between $44 billion and $45 billion — again well ahead of analyst estimates of $2.98 per share and $34.97 billion in revenue. For fiscal 2027 as a whole, Dell raised its guidance to $17.90 in adjusted earnings per share on revenue of $165 billion to $169 billion, implying roughly 47% growth at the midpoint.

As of Thursday's close, Dell's stock was up more than 150% for the year, compared with the S&P 500's roughly 10% gain over the same period.

The results come days after the Pentagon announced a five-year contract with Dell worth $9.7 billion for Microsoft 365 productivity services. President Donald Trump, who became a Dell shareholder in the first quarter according to filings with the U.S. Office of Government Ethics, publicly endorsed the stock at a White House event earlier this month.

With supply constraints tightening and demand continuing to outpace capacity, Dell's ability to fulfill its raised guidance will depend heavily on whether the component shortages Clarke described ease before the back half of the fiscal year.

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