Shares of the personal computer and data center server maker Dell Technologies Inc. were up more than 6% in late trading today after it reported earnings and revenue that easily beat expectations.
The company reported second-quarter earnings before certain costs such as stock compensation of $7.04 per share, breezing past Wall Street’s target of just $4.92 per share by a wide margin. Revenue for the period also came in higher, reaching $46.97 billion compared to the consensus estimate of just $44.92 billion, up an impressive 58% from the same period last year. With such strong results, Dell’s profitability soared almost four-times higher, with net profit rising from $1.16 billion in the year-ago period to $4.13 billion today.
Dell sees more good things coming too. For the third-quarter, it’s forecasting earnings of around $6.50 per share on sales of $49 billion at the midpoint of its guidance range, implying growth of 81%. That compared to Wall Street’s consensus of earnings of just $4.49 per share on sales of $41.42 billion.
On a conference call with analysts, Dell Chief Operating Officer Jeff Clarke (pictured) said the company was elevating its annual revenue guidance after raising its prices to account for rising component costs. As a result, the full-year picture looks brighter than ever, for Dell upped its annual forecast. The company said it now sees earnings coming to $25.50 per share on total sales of $192 billion, up from its earlier guidance of $17.90 per share in earnings and $165 billion in sales. Wall Street, in contrast, is looking for full-year earnings of just $18.92 per share on sales of $172.67 billion.
Dell’s stock had declined more than 6% during the regular trading session this morning before clawing back those losses following today’s report. Nonetheless, it’s still up an incredible 236% in the year to date, compared to the broader S&P 500 Index’s gain of just 11% over the same timeframe. Dell is benefiting from investors wanting to find new ways to bet on the growth of artificial intelligence. The company is one of the world’s biggest manufacturers of the AI servers capable of running the most powerful large language models. It was also boosted in July when U.S. President Donald Trump, who owns a substantial number of its shares, recommended that consumers and businesses alike go out and buy its computers.
Dell’s founder Michael Dell, who serves as its chairman and chief executive officer, now ranks fifth overall in Bloomberg’s list of the world’s wealthiest individuals.
There’s an old Texas saying I may have just made up… If you keep growing EPS 200%+ y/y something good will happen.
— Michael Dell 🇺🇸 (@MichaelDell) September 1, 2026
Digging into the company’s results, there were no surprises to see where most of the growth came from. Dell’s Infrastructure Solutions Group, which accounts for sales of data center hardware like servers, storage arrays and networking equipment, delivered $31.78 billion in revenue, up 89% from a year earlier. It easily surpassed the $29.61 billion consensus estimate. AI-optimized servers accounted for $16.4 billion of that number, ahead of the Street’s forecast of $16.07 billion.
Elsewhere within that segment, storage revenue increased 26% to $4.85 billion, while sales of traditional servers and networking gear were up 122% to $10.53 billion. That last number makes it clear that AI is even benefiting non-AI segments. “We are seeing a growing trend of customers that require meaningful CPU compute capacity to support AI and agentic workflows, and these workloads are creating incremental demand for traditional servers,” Clarke told analysts.
According to Clarke, Dell now forecasts sales of AI-optimized servers to reach $74 billion in fiscal 2026, which would represent growth of more than 200% compared to the prior year. Just six months earlier, the company had forecast AI server growth of just 13%.
Forrester Research analyst Naveeen Chhabra said it’s clear that there’s no slowing down in the scramble by enterprises to commit more capital to their AI initiatives, even if many are growing concerned about increasing economic uncertainty. “Dell’s results suggest that enterprise AI investment is moving beyond experimentation and driving a broader infrastructure modernization cycle,” he said. “Organizations are discovering that deploying AI workloads often requires upgrades across networking, storage, security, observability and end-user computing environments too.
Dell’s other big business segment is the Client Solutions Group, which sells PCs and related accessories. Revenue there rose 20% to $15.03 billion during the quarter, just below the Street’s target of $15.08 billion. Clarke told analysts that this was not unexpected, because the company had already warned it was seeing signs of softening in the PC market in the second half of the year, and duly made preparations for this. “We optimized the bits and bytes we have towards the infrastructure business,” he said.
During the quarter, Dell hosted its annual user conference, Dell Technologies World, where it revealed it has struck key partnerships with Advanced Micro Devices Inc. and Microsoft Corp. It also announced it had won a $9.7 billion contract to provide software to the U.S. military, while the AI-focused cloud infrastructure firm Iren Ltd. struck a deal to buy $1.6 billion worth of Dell’s servers and networking equipment.
Michael Dell stopped by theCUBE, SiliconANGLE Media’s mobile livestreaming studio, where he sat down with hosts John Furrier and Dave Vellante to discuss how the AI factory revolution is moving enterprises from experimentation into full-scale production:
Photo: SiliconANGLE
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