Dell raises forecasts as AI server demand surges on Nvidia chips

Dell raised its revenue and profit forecasts after a surge in demand for AI-optimized servers showed where the generative AI boom is producing the clearest winners: data-center hardware, storage, and enterprise infrastructure. The company said clients kept buying machines built around Nvidia chips, with customers including CoreWeave, Honeywell International and Samsung Electronics helping fuel the demand spike.

The new outlook was aggressive. Dell now expects about $60 billion in AI server revenue in fiscal 2027, up from a previous estimate of $50 billion. It lifted its annual revenue forecast to between $165 billion and $169 billion, from an earlier range of $138 billion to $142 billion, and increased its adjusted earnings-per-share target to $17.90 from $12.90. Investors quickly rewarded the numbers, sending Dell shares up about 39% in extended trading.

The latest quarter showed how fast the business is scaling. Dell posted revenue of $43.84 billion, up 88% from a year earlier and well above analysts’ average estimate of $35.43 billion. Adjusted earnings per share came in at $4.86, also ahead of expectations. Dell said its infrastructure solutions group, which includes storage, software and servers, jumped 181%, while the client solutions group, home to PCs, rose 17%. That gap underlined how sharply corporate spending is tilting toward AI-ready infrastructure rather than traditional personal computing.

Chief operating officer Jeff Clarke said the company is repricing products frequently because of inflation and supply pressures, and that customers are feeling that strain too. Dell is also working through a memory chip shortage with price increases and supply-chain adjustments. The company said it has more than 5,000 AI server customers, giving it a broad base of demand beyond a handful of marquee deals.

The numbers build on a strong run. In February, Dell said fiscal 2026 full-year revenue reached a record $113.5 billion, up 19% from a year earlier. It said AI-optimized server sales totaled about $10 billion in fiscal 2025, with about $15 billion expected in fiscal 2026, and that AI server backlog stood at roughly $9 billion after bookings that included xAI. For fiscal 2025, Dell reported revenue of $95.6 billion, with infrastructure solutions revenue of $43.6 billion and client solutions revenue of $48.4 billion.

Dell’s latest surge also reflects the scale of enterprise and government spending behind AI. Alphabet and Amazon are both planning to spend more than $700 billion on AI infrastructure this year, while the U.S. Department of Defense separately awarded a Dell unit a five-year, $9.7 billion contract to manage Microsoft software licenses. For Dell, the message is clear: the AI buildout is not just lifting chipmakers, but also the companies that supply the servers, storage and software holding the system together.