Dell raises annual forecast on record AI server orders

Dell Technologies raised its full-year revenue and profit forecasts after reporting unprecedented demand for AI-optimized servers, sending shares up nearly 10% in premarket trading Wednesday.

The infrastructure provider now expects annual revenue of $192 billion, up from a prior forecast of $167 billion, and adjusted earnings per share of $25.50 versus $17.90 previously. Second-quarter revenue jumped 58% to a record $47 billion, exceeding Wall Street's $44.92 billion estimate, according to Reuters, which first reported the results.

Record order backlog signals sustained momentum

Dell reported $60 billion in orders during the quarter and maintains a $95 billion backlog, both company records. The servers, equipped with Nvidia chips, are being purchased by AI cloud providers including Nscale and CoreWeave to build computing clusters for training and deploying large language models.

"The AI momentum spoke for itself," analysts at J.P. Morgan noted in response to the results.

Melius Research analysts highlighted that storage strength is playing a significant role, describing the growth as sustainable because AI is driving fundamental expansion in Dell's most profitable business segment. The brokerage raised its price target on the stock to $735, the highest among analysts tracked by LSEG.

Why it matters

Dell's results provide concrete evidence that AI infrastructure spending by hyperscalers and cloud providers is translating into sustained revenue growth for hardware manufacturers. The company's massive order backlog suggests this demand will continue well into future quarters, validating the capital-intensive buildout of AI data centers. For enterprise technology leaders, Dell's performance indicates that AI workloads are creating genuine, measurable business opportunities beyond the hype cycle.

Broader market impact

The strong results lifted other AI server manufacturers in sympathy trading. Super Micro Computer shares rose 0.7% and Hewlett Packard Enterprise gained 5.4% following Dell's announcement. Super Micro had also reported strong results the previous month, reinforcing the sector-wide trend.

Dell's stock was set to add approximately $26 billion in market value at the current share price of $465 if gains held through the trading session. The shares were trading at 18.12 times expected earnings over the next 12 months, compared with 12.56 for HPE and 8.06 for Super Micro.

The results underscore how AI infrastructure companies are benefiting as technology firms and hyperscalers accelerate investments in data centers to support AI applications and large language models.

Details were first reported by Reuters.