Original Title: Dell lifts forecasts as AI data center buildout fuels demand, shares soar
Original Author: Jaspreet Singh, Reuters
Original Translation: Peggy
Editor's Note: Dell's stock price surged after-hours, driven not merely by exceeding earnings expectations, but by the market's reevaluation of the value of the AI infrastructure chain.
Driven by demand for AI data center construction, Dell's first quarter revenue grew 88% year-over-year to $43.84 billion, and it raised its fiscal year 2027 AI server revenue forecast from $50 billion to approximately $60 billion. Following the earnings report, the company's stock price rose about 39% in after-hours trading.
This indicates that the AI boom is extending from models and chips to servers, memory, storage, and data center equipment. As technology giants like Alphabet and Amazon continue to increase their investments in AI infrastructure, hardware manufacturers like Dell—who possess supply chain, customer relationships, and delivery capabilities—are becoming direct beneficiaries of a new cycle of AI capital expenditure.
At the same time, Dell's subsidiary secured a $9.7 billion contract from the U.S. Department of Defense, which further strengthened market expectations for its order growth and revenue certainty. For investors, Dell's rise signifies that the AI trade is entering a more downstream and tangible phase: those who can turn chips into deliverable data center infrastructure may achieve the next round of valuation reassessment.
Below is the original text:
TL;DR
Dell raises full-year AI server revenue forecast to $60 billion
The company provided second quarter performance guidance above market expectations
First quarter revenue grew 88% year-over-year to $43.84 billion
In after-hours trading, the company's stock price rose about 39%
Dell's subsidiary received a $9.7 billion contract from the U.S. Department of Defense
Dell raised its revenue and profit forecasts on Thursday, indicating that customer data center expansion is driving the growth in demand for its AI-optimized servers. These servers are equipped with advanced Nvidia chips.
Dell's customers include CoreWeave, Honeywell International, and Samsung Electronics. After the earnings report, the company's stock price rose about 39% in after-hours trading.
American tech giants, including Alphabet and Amazon, plan to invest over $700 billion in AI infrastructure this year, which will increase demand for servers and data center equipment from suppliers including Dell and Supermicro.
Strong performance indicates that Dell has already become one of the biggest beneficiaries of the generative AI boom. The company has managed to cope well with the memory chip shortage crisis through price increases and supply chain adjustments.
Dell's COO Jeff Clarke stated during the earnings call: "We feel like we're almost re-pricing every day. I believe customers feel that pressure too. Unfortunately, considering the inflationary environment we are currently in, I don't think that will change."
Dell now expects AI server revenue for fiscal year 2027 to be approximately $60 billion, up from a previous forecast of $50 billion.
The company also raised its full-year revenue forecast to $165 billion to $169 billion, a significant increase over the previous forecast of $138 billion to $142 billion.
At the same time, Dell raised its full-year adjusted earnings per share forecast from $12.90 to $17.90.
In the first quarter, Dell's revenue grew 88% year-over-year to $43.84 billion, significantly exceeding the analyst average expectation of $35.43 billion as compiled by LSEG. Adjusted earnings per share were $4.86, also higher than the market expectation of $2.94.
S&P Global Visible Alpha research director Melissa Otto stated: "Due to economies of scale, supplier relationships, and the ability to prioritize demand, Dell is in a more advantageous position compared to its competitors, which has helped it gain market share during the memory shortage."
Dell's Infrastructure Solutions Group saw quarterly revenue grow by 181%. This division includes storage, software, and server businesses. Meanwhile, the Client Solutions Group, which includes the PC business, saw sales grow by 17%.
The company also provided second quarter revenue and adjusted earnings per share guidance above market expectations.
On Wednesday, the U.S. Department of Defense awarded a five-year, $9.7 billion contract to Dell's subsidiary to assist in the management of Microsoft software licenses.
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