Dell Q1 Revenue Grows 88%, AI Revenue Surges 757%, Shares Jump as Much as 40% After Hours
Dell Technologies reported Q1 fiscal 2027 results significantly exceeding expectations, with revenue up 88% year-over-year to $43.8 billion, driven by AI server demand. AI-optimized server revenue surged 757% to $16.1 billion, contributing to an AI server backlog of $51.3 billion. The company raised its full-year AI server revenue forecast to $60 billion and total revenue guidance to $165-169 billion. GAAP diluted EPS reached $5.24, and operating cash flow was $4.1 billion, both record highs. Dell also announced a significant Pentagon defense contract.
TradingKey - After the market close on May 28, Dell Technologies ( DELL.US) released its first-quarter results for fiscal 2027, with core metrics crushing market expectations across the board. The news sent the after-hours stock price up more than 39% at one point, marking its largest gain since 2018, as AI demand continues to drive the company toward cash-machine-style growth.
[Dell shares soar nearly 40% after hours, Source: Google Finance]
Dell's Q1 report showed that revenue, profit, and cash flow all hit record highs. Q1 revenue was $43.8 billion, up 88% year-over-year, far exceeding analysts' expectations of $35.5 billion.
[Dell Q1 Earnings Report, Source: Dell Q1 Press Release ]
GAAP diluted earnings per share reached $5.24, up 282% year-over-year; non-GAAP diluted earnings per share were $4.86, up 214% year-over-year. Operating cash flow reached $4.1 billion, with all three metrics hitting record highs.
Massive Orders Behind the 757% Surge in AI Server Revenue
The Infrastructure Solutions Group (ISG) reported quarterly revenue of $29 billion, a 181% increase year-over-year, accounting for approximately 66% of the company's total revenue.
[Dell AI servers surge 757%; Source: Dell Q1 Earnings Press Release ]
Within this segment, revenue from AI-optimized servers reached $16.1 billion, a staggering year-over-year surge of 757%. Total AI orders for the quarter were recorded at $24.4 billion, with the customer base surpassing 5,000, representing growth of over 50% compared to six months ago. By the end of the quarter, the AI server backlog stood at a high of $51.3 billion. Revenue from traditional servers and networking reached $8.5 billion, up 92% year-over-year, indicating that AI deployments are simultaneously driving demand for CPU-related hardware.
Full-year guidance has been significantly raised. The company raised its fiscal year 2027 AI server revenue forecast from $50 billion to $60 billion, representing a 144% year-over-year increase. Total full-year revenue guidance was raised from $138-$142 billion to $165-$169 billion, with a midpoint of $167 billion, an increase of nearly 50% year-over-year.
The midpoint for full-year non-GAAP diluted earnings per share (EPS) was raised from $12.90 to $17.90. Furthermore, the company expects second-quarter revenue to be between $44 billion and $45 billion, with the midpoint representing approximately 49% year-over-year growth.
Other business segments also showed signs of recovery. The Client Solutions Group (CSG) reported Q1 revenue of $14.6 billion, up 17% year-over-year, with commercial client revenue reaching a record $13 billion. Storage revenue was $4.3 billion, up 8% year-over-year. Dell returned $2.1 billion to shareholders through stock buybacks and dividends.
Jeff Clarke, Dell’s Chief Operating Officer, stated in the earnings release: "Our revenue forecast for AI servers has been raised to $60 billion, further proving that the AI opportunity shows no signs of slowing down."
Chief Financial Officer David Kennedy attributed the quarter’s outstanding performance to exceptional execution across the board, from supply chain and sales to pricing.
Notably, Dell Technologies previously secured a $9.7 billion defense contract from the Pentagon, solidifying its position in government IT procurement and helping to bolster market confidence.
This content was translated using AI and reviewed for clarity. It is for informational purposes only.
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