Key Moments
- Dell Technologies’ shares rose nearly 10% in premarket trading after the company raised its full-year revenue and earnings guidance.
- Second-quarter revenue increased 58% to a record $47 billion, beating the Wall Street estimate of $44.92 billion.
- Analysts highlighted Dell’s $60 billion in orders and $95 billion backlog, underscoring strong and persistent AI-related demand.
AI Server Demand Lifts Shares and Outlook
Dell Technologies’ shares climbed nearly 10% in premarket trading on Wednesday, after the company boosted its annual revenue and profit projections on the back of surging demand for its AI-optimized servers.
AI infrastructure providers have been seeing heightened interest as technology companies and hyperscalers expand data center investments to support large language models and other AI workloads. Super Micro Computer, a sector peer, had also delivered positive results last month.
Record Orders and Backlog Underpin AI Momentum
Analysts at J.P.Morgan pointed to Dell’s strong order trends, stating, “The AI momentum spoke for itself,” and highlighted the company’s record $60 billion of orders and $95 billion backlog in the quarter.
Dell’s servers, which incorporate Nvidia chips, are being deployed by customers such as AI cloud providers Nscale and CoreWeave to assemble computing clusters used for training and running AI models.
Storage and Profitability in Focus
Commenting on Dell’s product mix, analysts at Melius Research said, “Storage strength is really playing a role and it seems sustainable as AI is driving fundamental growth in Dell’s most profitable business.”
Melius Research raised its price target on Dell’s stock to $735, which is the highest target among analysts tracked by LSEG.
Upgraded Guidance and Quarterly Performance
Dell increased its annual revenue outlook to $192 billion, up from a prior forecast of $167 billion. The company also raised its adjusted earnings per share target to $25.50, compared with an earlier target of $17.90.
For the second quarter, Dell reported revenue of $47 billion, a 58% year-on-year increase and a new quarterly record, exceeding the Wall Street estimate of $44.92 billion.
| Metric | Previous Guidance / Estimate | New / Actual Figure |
|---|---|---|
| Annual revenue forecast | $167 billion | $192 billion |
| Adjusted EPS target | $17.90 | $25.50 |
| Q2 revenue | $44.92 billion (Wall Street estimate) | $47 billion |
| Quarterly orders | – | $60 billion |
| Quarterly backlog | – | $95 billion |
Ripple Effect Across AI Server Peers
The positive read-through from Dell’s results extended to other AI-focused hardware players. Shares of Super Micro Computer and Hewlett Packard Enterprise moved higher by 0.7% and 5.4%, respectively, following Dell’s update.
Valuation and Market Capitalization Impact
At the current share price of $465, Dell is on track to add about $26 billion in market value if the gains persist.
Based on LSEG data, Dell’s shares were trading at 18.12 times expected earnings over the next 12 months. This compares with multiples of 12.56 for Hewlett Packard Enterprise and 8.06 for Super Micro Computer.
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