"AI Server Orders $60.9 Billion:...Dell (DELL) Raises Annual Outlook Again

▲ Dell (DELL), AI Server/AI Generated Image

Dell Technologies (DELL) delivered results that significantly exceeded Wall Street's expectations and raised its annual outlook, driven by a surge in AI server orders.

According to MarketWatch on September 1 (local time), Dell's revenue for the second quarter of fiscal year 2027 increased by 58% year-over-year to $47 billion. This surpassed Wall Street's estimate of $44.9 billion compiled by FactSet. Adjusted earnings per share were $7.04, exceeding the estimate of $4.91 and representing a 203% increase year-over-year.

AI servers boosted performance. Dell's AI server orders in the second quarter amounted to $60.9 billion. AI server revenue increased by 100% year-over-year to $16.4 billion. The order backlog at the end of the quarter significantly grew to $95 billion from $51.3 billion at the time of the previous earnings announcement. Dell supplies AI-optimized data center servers that support Nvidia (NVDA) AI chips.

Chief Operating Officer Jeff Clarke stated, “The IT environment has shifted from a cost center to a value driver that creates growth and competitive advantage, and customers are investing accordingly.” Dell expects AI to account for 75% of total data center demand by 2030. It anticipates opportunities exceeding $1 trillion in the computing infrastructure market for NeoCloud, government, and enterprise customers.

Growth continued outside of AI. Revenue from traditional data center servers and networking increased by 122% to $10.5 billion, and storage revenue grew by 26% to $4.9 billion. Revenue from the Client Solutions Group, including PCs, also increased by 20% to $15 billion. Dell provided guidance for Q3 adjusted EPS of $6.5 and revenue of $49 billion. Wall Street's estimates were $4.46 and $41.4 billion, respectively.

Dell raised its full-year revenue outlook for fiscal year 2027 from the previous $167 billion to $192 billion, representing a 70% increase year-over-year. The adjusted EPS outlook was also raised to $25.5, with a year-over-year increase of 148%. Chief Financial Officer David Kennedy stated, “AI momentum is accelerating, and opportunities across the business are expanding.”

[Key Summary of Article]

-Dell's AI server orders in Q2 amounted to $60.9 billion, with related revenue of $16.4 billion, and the order backlog increased to $95 billion.

-Total Q2 revenue was $47 billion, and adjusted EPS was $7.04, both exceeding Wall Street's estimates.

-Dell raised its fiscal year 2027 revenue outlook to $192 billion and provided adjusted EPS guidance of $25.5.

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