Dell Technologies Shares rose 9% in after-hours trading Tuesday after the computer maker announced earnings and forecasts that easily beat Wall Street expectations.
The company’s performance against LSEG Consensus is as follows:
Earnings per share: $7.04 adjusted vs. $4.92 expected Revenue: $46.97 billion vs. $44.92 billion expected
Revenue for the second quarter of the fiscal year ended July 31 exceeded all expectations, increasing about 58% from the same period last year, the statement said. Net income was $4.13 billion, or $6.34 per share, up from $1.16 billion, or $1.70 per share, in the year-ago period. Adjusted earnings do not include the impact of stock-based compensation.
For the fiscal third quarter, Dell estimated adjusted earnings per share of $6.50 on revenue of $49 billion. This represents a growth of 81%. Analysts polled by LSEG had expected earnings of $4.49 per share and revenue of $41.42 billion.
Dell gradually raised its full-year forecast. The company now expects adjusted earnings per share to be $25.50 on revenue of $192 billion. Analysts surveyed by LSEG expected earnings of $18.92 per share and revenue of $172.67 billion. The company’s 2027 guidance as of May called for adjusted earnings per share of $17.90 and revenue of $165 billion to $169 billion.
Jeff Clark, Dell’s executive director, said on a conference call with analysts that higher prices driven by higher input costs are factored into the higher earnings outlook.
As of Tuesday’s close, Dell’s stock price was up 236% since the beginning of the year, while the broader S&P 500 index was up 11% over the same period. This stock has become a popular choice for investors looking to bet on the continued growth of artificial intelligence infrastructure. President Trump, who has been buying Dell stock since returning to office last year, recommended buying Dell computers again in July.
Michael Dell, the company’s founder, chairman and CEO, is now the fifth richest person in the world, according to Bloomberg calculations.
“An old man in Texas says I might have made up…” Michael Dell posted on X after the results came out. “If we continue to grow EPS over 200% year over year, something good will happen.”
The company’s infrastructure solutions group, which covers data center hardware, reported second-quarter revenue of $31.78 billion, an 89% increase and above the $29.61 billion consensus of analysts surveyed by StreetAccount. In this segment, Dell generated $16.4 billion in revenue from AI-optimized servers. This amount exceeded the consensus of $16.07 billion from street accounts.
Storage revenue was $4.85 billion, an increase of nearly 26%. Revenue from traditional servers and networking equipment increased 122% to $10.53 billion.
“We’re seeing an increasing trend in customers requiring meaningful CPU computing power to support AI and agent workflows,” Clarke said. “These workloads are increasing demand on traditional servers.”
Dell’s Client Solutions Group, which sells PCs and accessories to consumer and business customers, contributed $15.03 billion in revenue. This number increased 20% but was slightly below the StreetAccount consensus of $15.08 billion.
“One of the things we did early this year was confirm that the PC market was showing signs of softening in the second half of the year,” Clark said. “We have optimized the bits and bytes we have for the infrastructure business.”
During the quarter, Dell received $9.7 billion in contracts to provide software to the U.S. military and AI-centric cloud infrastructure providers. Airen announced an agreement to purchase Dell hardware for $1.6 billion. Nvidia Chips.
Dell now expects AI-optimized server sales to increase 200% to $74 billion for the fiscal year. Just six months ago, the company was forecasting 103% growth.
WATCH: Piper Sandler’s James Fish looks ahead to Tuesday’s Dell earnings
