Dell reported its fastest pace of revenue growth for any period since its return to the public market more than seven years ago, and topped analysts’ estimates for sales and profit. The stock climbed as much as 19% in extended trading on Thursday.
Here’s how the company did in comparison with LSEG consensus:
- Earnings per share: $4.86 adjusted vs. $2.94 expected
- Revenue: $43.84 billion vs. $35.43 billion expected
Revenue soared nearly 88% from a year earlier in the quarter, which ended on May 1, according to a statement. Since its IPO in 2018, which came five years after the server maker was taken private, year-over-year growth has never exceeded 39%, a mark that was hit in the January period.
The expansion is being driven by artificial intelligence, with Dell assembling servers containing graphics processing units from the likes of Nvidia. Dell said it AI server revenue increased 757% from a year earlier to $16.1 billion. For the full year, Dell now expects AI revenue of $60 billion, up from a projection of $50 billion in February. That would reflect 144% growth.
Dell said it had over 5,000 AI server customers, including neoclouds, sovereign clients and enterprises.
As of Thursday’s close, Dell’s stock was up more than 150% for the year, compared to the S&P 500’s roughly 10% gain.
One big winner in the Dell pop is President Donald Trump, who became a shareholder in the first quarter, according to U.S. government ethics filings. At a White House event earlier this month, Trump said, “Go out and buy a Dell.”
On Wednesday the Pentagon announced a five-year contract with Dell worth $9.7 billion for Microsoft 365 productivity services. That comes roughly five months after Dell CEO Michael Dell and his wife, Susan Dell, donated $6.25 billion to fund Trump Accounts for 25 million U.S. children.
Dell said net income in the latest quarter more than tripled to $3.44 billion, or $5.24 per share, from $965 million, or $1.37 per share, a year earlier. In January, Dell raised prices to reflect higher input costs tied to the global memory shortage from the AI boom.
The company has been facing “notable commodity constraints, particularly in DRAM and NAND,” Jeff Clarke, Dell’s vice chairman and operating chief, said on a conference call with analysts.
For the fiscal second quarter, Dell is targeting $4.80 in adjusted earnings per share on between $44 billion and $45 billion in revenue. Analysts polled by LSEG were looking for $2.98 per share in earnings and $34.97 billion in revenue.
Dell upped its forecast for the 2027 fiscal year, and now sees $17.90 in adjusted earnings per share, with between $165 billion and $169 billion in revenue, implying 47% growth at the middle of the range. Analysts surveyed by LSEG had anticipated $13.09 per share, on $142.5 billion in revenue.
Revenue from Dell’s Infrastructure Solutions Group, featuring servers and other data center equipment rose 181% to $29 billion, well above StreetAccount’s $22.4 billion consensus. Growth accelerated across AI servers and traditional servers and networking gear.
“We saw AI inference workloads driving incremental demand for traditional compute,” Clarke said.
The Client Solutions Group, which includes consumer and business PCs and accessories, recorded a 17% increase in revenue to $14.6 billion, above the $12.8 billion StreetAccount consensus. During the quarter, Dell announced new laptops and workstations for business clients.
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