Dell surges 12% amid AI driving 40% revenue growth 📈

Dell Technologies reported fourth-quarter and full-year fiscal 2026 results, delivering record revenue, earnings, and cash flow. The company also presented very strong guidance for fiscal year 2027, driven by rapid growth in its AI-optimized server segment. Market reaction was clearly positive, with the stock rising 12% in after-hours trading.

The results confirm that Dell is increasingly transforming itself from a traditional PC manufacturer into a key provider of data center infrastructure and AI solutions. The Infrastructure Solutions Group (ISG) is now responsible for the majority of the company’s growth momentum, with quarterly AI-optimized server revenue surging more than 300% year over year. Dell reported over $64 billion in AI server orders in FY2026 and entered the new fiscal year with a backlog of $43 billion, signaling strong revenue visibility for the coming quarters.

Key highlights from the report

Full-year FY2026:

Revenue: $113.5 billion (+19% YoY), a company record
GAAP EPS: $8.68 (+36% YoY)
Non-GAAP EPS: $10.30 (+27% YoY)
Operating cash flow: $11.2 billion (record)
Capital returned to shareholders: $7.5 billion
20% dividend increase and $10 billion expansion of share repurchase authorization

Fourth quarter FY2026:

Revenue: $33.4 billion (+39% YoY), above market expectations
GAAP EPS: $3.37 (+57% YoY)
Non-GAAP EPS: $3.89 (+45% YoY), above consensus
Operating cash flow: $4.7 billion (quarterly record)

Infrastructure Solutions Group (ISG):

Full-year revenue: $60.8 billion (+40% YoY)
Quarterly revenue: $19.6 billion (+73% YoY)
Q4 AI-optimized servers revenue: $9.0 billion (+342% YoY)
Full-year operating income: $7.1 billion (+27% YoY)

Client Solutions Group (CSG):

Full-year revenue: $51.0 billion (+5% YoY)
Quarterly revenue: $13.5 billion (+14% YoY)
Commercial segment: +16% YoY in Q4
Consumer segment: flat year over year

FY2027 guidance:

Revenue: $138–142 billion (midpoint $140 billion, +23% YoY)
GAAP EPS: $11.52 (+33% YoY)
Non-GAAP EPS: $12.90 (+25% YoY)
AI server revenue: approximately $50 billion (+103% YoY)
Q1 FY2027 revenue: $34.7–35.7 billion, well above market expectations

Investors responded positively primarily to the ambitious yet credible guidance for the current fiscal year, which clearly exceeds market consensus. Particularly significant is the expected doubling of AI server revenue to around $50 billion. Strong cash flow generation, a higher dividend, and an expanded share buyback program further support the company’s valuation. As a result, Dell is increasingly viewed as one of the main beneficiaries of the global investment boom in AI infrastructure.

Dell stock chart (D1)

Dell shares are up nearly 12% today, and the chart shows a potentially bullish formation resembling an inverse head and shoulders pattern.

Source: xStation5

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