Dell Reports $47B Quarter on AI Server Surge, Raises Outlook
Infrastructure revenue jumped 89% as the company booked a $95 billion AI server backlog and more than tripled its stock price this year.
Dell Technologies reported record quarterly revenue of $47 billion for its fiscal second quarter ending July 31, significantly exceeding Wall Street expectations and prompting the company to raise its full-year financial outlook for the second consecutive time.
The results, announced Tuesday, showed revenue climbing 58% year-over-year to $46.97 billion, well above the $44.92 billion analysts had anticipated. Adjusted earnings per share reached $7.04, more than tripling the prior year's figure and surpassing the consensus estimate of $4.91.
AI infrastructure drives growth
Dell's Infrastructure Solutions Group generated $31.78 billion in revenue, an 89% increase from the same quarter last year. AI-optimized servers alone contributed $16.40 billion to that total, doubling year-over-year performance. The company disclosed a backlog of $95 billion in AI server orders at quarter's end, according to details first reported by Bloomberg.
Traditional server and networking revenue surged 122% to $10.53 billion, while storage products added $4.85 billion, up roughly 26%. The infrastructure segment's performance reflects enterprise demand for on-premises AI capabilities as companies weigh cloud costs against internal deployment options.
PC business shows steady gains
The Client Solutions Group, which handles Dell's PC and accessories business, recorded $15.03 billion in quarterly revenue, a 20% year-over-year increase. Commercial customers accounted for $13.19 billion of that figure, up 22%, while consumer sales contributed $1.84 billion, rising 7%.
Revised guidance reflects momentum
Dell now expects full fiscal year revenue of approximately $192 billion—$25 billion higher than its previous forecast—with AI-optimized server sales projected to reach $74 billion. The company raised its full-year adjusted earnings per share guidance to $25.50 from $17.90.
For the fiscal third quarter, Dell projected $49 billion in revenue and adjusted EPS of $6.50, compared to analyst expectations of $41.42 billion and $4.48 respectively.
"Our advantages reinforce one another, and throughout the quarter we used these strengths to drive growth, share gains, profitability, and cash generation," CFO David Kennedy said in a statement.
Dell shares rose approximately 8% in extended trading following the announcement. The stock has more than tripled in value during 2024.
Why it matters
Dell's results demonstrate how traditional hardware vendors are capturing enterprise AI spending as companies build internal infrastructure rather than relying solely on cloud providers. The $95 billion server backlog suggests sustained demand through at least the next several quarters, positioning Dell as a primary beneficiary of the shift toward on-premises AI deployment. The company has been developing products built on Nvidia software to give enterprises alternatives for running AI workloads, targeting buyers concerned about escalating costs associated with agentic AI in cloud environments.
These details were first reported by Quartz and CNBC.
This is an original analysis by the Omega editorial team. Source reporting: AI Watch.
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