Dell Shares Surge 38% After AI-Driven Earnings Beat and Raised Forecast

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Dell Technologies rose 38% in New York premarket trading on May 29, 2026, after the company reported quarterly results that exceeded analyst expectations and issued a sharply higher annual forecast, according to a company statement. The surge reflected strong demand for artificial intelligence servers, which continued to reshape the hardware sector and reinforced Dell's position as a direct beneficiary of the AI infrastructure buildout, with hyperscaler capital expenditure accelerating toward an estimated $800 billion this year, according to a report by ZeroHedge. [1]

Chairman and CEO Michael Dell highlighted the company's partnership with Nvidia to build an AI factory for xAI, Elon Musk's artificial intelligence venture, as reported on social media. [1] The results come amid a broader technology industry shift in which companies are pouring hundreds of billions of dollars into AI hardware while simultaneously cutting jobs in other areas, as documented in multiple industry reports. [2] [3]

Key Results

For the fiscal first quarter ended May 1, 2026, Dell reported total net revenue of $43.84 billion, an increase of 88% from the same period a year earlier, according to the company statement. Adjusted earnings per share were $4.86, compared with the average analyst estimate of $2.99 compiled by Bloomberg, according to the report. [1] Cash flow from operations reached $4.1 billion, and adjusted operating income was $4.24 billion, up from $1.67 billion a year ago.

“Execution was exceptionally strong across the business – from supply chain to sales to pricing – driving record revenue of $43.8 billion, record EPS, record Q1 cash flow of $4.1 billion and continued strong shareholder returns of $2.1 billion,” said David Kennedy, chief financial officer of Dell Technologies, according to the company statement. [1] The results marked a significant acceleration from previous quarters, with revenue growth far outpacing the broader tech sector's performance. [2]

Segment Performance

The Infrastructure Solutions Group, which includes servers and storage, posted net revenue of $29.01 billion, up from $10.32 billion a year earlier, according to the company statement. AI server revenue rose to $16.1 billion, exceeding analyst estimates of $13.1 billion, while the AI server backlog grew to $51.3 billion, compared with an estimate of $45.33 billion, according to data compiled by Bloomberg. [1] Traditional server and networking revenue was $8.5 billion, up 92% year over year.

“Our record Q1 performance reflects strong in-quarter demand, as well as our pace of innovation across the full stack of PCs, compute and storage,” said Jeff Clarke, vice chairman and chief operating officer of Dell Technologies, according to the company statement. “We booked $24.4 billion in AI orders and recognized $16.1 billion of AI server revenue. We're increasing our AI server revenue expectations for FY27 to $60 billion, which only goes to show the AI opportunity shows no signs of slowing.” [1]

The Client Solutions Group, which includes personal computers, reported net revenue of $14.61 billion, up 17% year over year, led by commercial sales of $13.02 billion, according to the company statement. Consumer revenue was $1.59 billion, up 8.6%. [1] The broad-based strength in both enterprise and consumer segments underscored the company's diversified revenue base, even as the PC market faced headwinds from memory price increases, according to analysts. [5]

Outlook and Guidance

Dell raised its fiscal 2027 revenue forecast to $165 billion to $169 billion, up from a prior range of $138 billion to $142 billion, and above the Bloomberg consensus estimate of $142.1 billion, according to the company statement. [1] The company also increased its adjusted earnings per share outlook to $17.65 to $18.15, compared with the prior view of $12.65 to $13.15, versus the estimate of $13.14.

For the current fiscal second quarter, Dell forecast revenue of $44 billion to $45 billion, well above analyst estimates of $35.06 billion, according to the company statement. The company projected AI server revenue of about $15.5 billion in the quarter, and adjusted EPS of $4.70 to $4.90, compared with the estimate of $3.05. [1] The guidance implied that Dell expects its AI server revenue for the full fiscal year to reach $60 billion, according to the company statement. [1]

Analyst Reactions

Goldman Sachs analyst Katherine Murphy said the results and raised outlook should drive the stock higher, describing the quarter as a “broad-based beat” that raised the full-year outlook, according to a Bloomberg report. Murphy set a 12-month price target of $230 on the stock. [1] Citi maintained a buy rating with a $290 price target, stating that results “significantly exceeding expectations” and that the outlook was positive. [1]

Vital Knowledge noted that “there's absolutely nothing to complain about w/huge upside and a big guidance hike (demand is benefiting from AI, but the non-AI parts of the business performed well too, and component price inflation didn't crimp margins),” according to Bloomberg. [1] Bloomberg Intelligence said Dell's “robust 1Q sales and EPS beat, along with its sharply higher outlook, was broad-based and suggests sustained demand strength” and that “the magnitude of the guidance increase suggests strength in both AI and traditional servers will continue in coming quarters.” [1]

UBS analyst David Vogt raised his price target for the stock by 81% but kept a neutral rating, according to Bloomberg. [1] The range of analyst opinions reflected confidence in Dell's AI-driven growth trajectory, even as some expressed caution about valuation following the sharp rally.

Context and Conclusion

Dell's performance reflects continued strong demand from hyperscale cloud providers investing in AI infrastructure, with global capital expenditure on AI estimated at $800 billion this year, according to the ZeroHedge report. [1] The company's chairman and CEO Michael Dell highlighted a partnership with Nvidia to build an AI factory for xAI, as reported on social media. [1] Shares of Dell traded above $440 in premarket, marking a year-to-date increase of over 40%.

The AI infrastructure buildout has created a dual dynamic in the technology industry: while companies like Dell, Nvidia, and others benefit from surging demand for servers and chips, other firms have announced significant layoffs to redirect resources toward AI investments. Cisco Systems, for example, cut 5,500 jobs in August 2024 to make way for bigger AI investment, according to a report from NaturalNews.com. [3] Similarly, the broader tech industry saw more than 27,000 job cuts in August 2024 alone at companies such as Intel, Apple, IBM, and Cisco, according to another report. [2] The scale of AI investment is also creating pressure on companies to find savings elsewhere, as noted in an analysis of corporate earnings calls. [4]

As of May 29, 2026, Dell's market capitalization had climbed significantly, reflecting investor confidence that the company will remain a key supplier in the AI hardware ecosystem. The raised guidance and record quarterly results suggested that demand for compute-heavy server infrastructure shows no signs of abating, according to company executives. [1]