Dell Raises Fiscal Year Profit and Revenue Forecasts, Driving Pre-Market Surge in AI Server Maker Related Stocks
Dell Technologies reported Q1 FY27 results exceeding expectations, with revenue of $43.8 billion and non-GAAP EPS of $4.86, driven by an 181% surge in Infrastructure Solutions Group revenue, including a 757% increase in AI-optimized servers. The company raised full-year guidance, causing its shares to jump nearly 40% after hours and boosting the AI server sector. Wall Street analysts maintain a bullish outlook, with price targets raised significantly by Morgan Stanley and J.P. Morgan. Sustained gains will depend on future guidance updates and the conversion of AI server orders to cash flow.
TradingKey - On May 28, Eastern Time, Dell Technologies ( DELL.US) released blowout first-quarter fiscal 2027 earnings after the U.S. market close, with revenue and profit significantly exceeding expectations. The company also sharply raised its full-year financial guidance, driving Dell shares to surge nearly 40% in after-hours trading.
[Dell's stock price surged pre-market, driving a rally in the AI server sector. Source: Google Finance]
Dell's strong financial results and optimistic guidance ignited the entire AI server sector.
During the pre-market trading session on May 29, Eastern Time, Hewlett Packard Enterprise (HPE.US) rose over 23%, and AI server manufacturer Super Micro Computer (SMCI) jumped more than 7%. AI cloud infrastructure provider Nebius (NBIS) concurrently rose over 6% pre-market, while Super Micro Computer (SMCI.US) gained over 10% and HP Inc. (HPQ.US) climbed over 5%.
Dell's recently disclosed earnings report showed quarterly revenue of $43.8 billion, an 88% year-over-year increase, far exceeding analysts' expectations of $35.5 billion. Non-GAAP diluted earnings per share were $4.86, up 214% year-over-year. The core driver was the explosive growth in AI servers, with the Infrastructure Solutions Group (ISG) recording quarterly revenue of $29 billion, a 181% year-over-year increase; among this, revenue from AI-optimized servers reached $16.1 billion, a massive 757% surge year-over-year.
For a detailed analysis of Dell's earnings, please visit: "Dell Q1 Revenue Grows 88%, AI Revenue Surges 757%, Shares Jump as Much as 40% After Hours"
Wall Street institutions are consistently bullish on Dell's outlook. Morgan Stanley significantly raised its price target from $110 to $170 on May 21; JPMorgan Chase raised its price target from $205 to $280 on May 15, anticipating that management will further raise earnings growth guidance.
On that day, Dell's pre-market price action remained in a rapid price-discovery phase. Whether the subsequent gains can be sustained depends on whether the earnings guidance can translate into actual momentum for continued price target hikes by institutions, and whether the pace at which AI server orders are converted into cash flow meets expectations.
This content was translated using AI and reviewed for clarity. It is for informational purposes only.
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