Dell Technologies saw its shares rise in after-hours trading on Thursday following the announcement of an improved full-year profit outlook, driven by a surge in demand for artificial intelligence (AI) hardware. The Texas-based technology firm’s revised guidance shows the growing role of AI systems in enterprise computing.
For the latest quarter, Dell reported adjusted earnings per share (EPS) of $1.55, which was below the LSEG consensus estimate of $1.69. However, the company’s revenue of $23.38 billion slightly exceeded the anticipated $23.14 billion, displaying continued strength in its core business despite some pressure on margins.
Looking forward, Dell forecasted adjusted EPS of $2.25 for the current quarter, alongside revenue guidance between $28.5 billion and $29.5 billion. These projections significantly outstrip analyst expectations and demonstrate confidence in the company’s growth prospects, largely propelled by AI-related sales.
The company attributes this positive outlook to the anticipated shipment of approximately $7 billion worth of AI systems during the quarter. These AI products typically generate higher profit margins compared to Dell’s traditional hardware lines, providing a notable boost to overall profitability.
As a key partner of Nvidia, Dell integrates the chipmaker’s advanced graphics processing units (GPUs) into its AI servers. Dell described the current demand for AI systems as “unprecedented,” particularly from emerging cloud providers such as Coreweave, which are swiftly expanding their AI capabilities.
Dell currently holds $14.4 billion in confirmed AI system orders, expected to be fulfilled over the coming quarters. In the first quarter alone, the company secured $12.1 billion in AI-related orders. These confirmed orders will convert into revenue once the systems are shipped, offering strong visibility into future sales.
For the full fiscal year, Dell maintains its revenue forecast at approximately $103 billion, consistent with market expectations. However, it raised its adjusted EPS guidance to $9.40, up 10 cents from the previous outlook, reflecting improved profitability driven by AI and infrastructure sales.
Dell’s Infrastructure Solutions Group, which includes servers, storage, and networking equipment, posted $10.3 billion in sales during the quarter, marking a 12% year-on-year increase. Within this segment, server and networking sales accounted for $6.3 billion, while data storage contributed $4 billion.
Meanwhile, the Client Solutions Group, responsible for laptops and personal computers, generated $12.5 billion in revenue. This growth aligns with industry forecasts predicting a recovery in the global PC market following several years of decline due to supply chain disruptions and shifting consumer preferences.
In addition, Dell increased its capital returns to shareholders, distributing $2.4 billion through share buybacks and dividends during the quarter. This represents a marked acceleration compared to the $2.58 billion spent on share repurchases throughout the entire fiscal year 2025, which ended in January.
According to recent IDC reports, global spending on AI systems is expected to surpass $100 billion by 2026, driven by widespread enterprise adoption of machine learning, data analytics, and generative AI technologies. Dell’s investments in AI-ready servers position it well to capture a substantial share of this expanding market.
The company’s enhanced guidance arrives amid growing competition in the AI hardware sector. Key rivals such as Hewlett Packard Enterprise, Lenovo, and Cisco are also expanding their AI-capable server offerings to meet rising demand. However, Dell’s close collaboration with Nvidia and its extensive global sales and service network provide a competitive advantage.
Although adjusted EPS fell slightly short of some analyst estimates, the strong demand for AI systems and a growing order backlog support a positive near-term outlook. With a firm foothold in both infrastructure and client computing markets, Dell is well-positioned to benefit from the accelerating adoption of AI technologies across various industries.