NEW YORK, September 3, 2026– Dell Technologies stock surged 15.76% to end the session at $492 after smashing Q2 expectations. This performance by the company was mainly attributed to an impressive fiscal second-quarter report that beat Wall Street predictions and forced management to drastically upgrade its full-year outlook. The positive market response reflected increasing investor optimism around Dell’s AI infrastructure segment, though some analysts still question whether this explosive surge in demand can last.
In the second quarter, which ended on July 31, Dell posted revenues of $46.97 billion, representing a growth rate of 58% over the same quarter last year. On the non-GAAP side, the company recorded diluted earnings of $7.04 per share against $4.92 per share a year ago, surpassing analysts’ expectations.
The GAAP diluted earnings figure stood at $6.34 compared to $1.70 last year.
Numbers looked good on more than one front within the company. Dell’s Infrastructure Solutions Group revenue rose 89% to $31.78 billion. Meanwhile, the revenue of AI-optimized servers increased 100% to $16.4 billion. Revenue from traditional servers and networking services saw an increase of 122% to $10.53 billion, implying that investment is expanding outside the AI optimized servers to broader infrastructure modernization.
It was then the number that made headlines for Wall Street: the AI server orders for Dell during the quarter amounted to $60.9 billion, taking the company’s AI backlog to $95 billion. The backlog helps Dell have visibility for its future sales, even though the orders need to be manufactured, delivered and eventually recorded in revenues.
Dell mentioned that it now has over 6,500 customers of its AI offering, comprising enterprise, sovereign and specialized cloud customers. Revenue from storage saw an increase of 26% to $4.85 billion, while Dell’s Client Solutions Group of Dell saw a 20% rise to $15.03 billion compared to last year. Commercial client revenue increased 22% to $13.19 billion.
The revised projection by the management was another boost to the stock. The company now projects its revenues for fiscal 2027 at $192 billion, give or take $2 billion, from its earlier forecast of $167 billion. The company has also revised its non-GAAP earnings expectation to approximately $25.50 from $17.90 per share, along with server revenues through AI of about $74 billion for the year.
For the upcoming third quarter, Dell projects revenues of $49 billion and earnings of $6.50 per share.
Yet, investors shouldn’t overlook potential supply chain bottlenecks. As demand intensifies, executive leadership acknowledged that hardware components remain tight across the market. “The constraints remain the same: DRAM followed by NAND,” noted executive management during the earnings call, pointing out that component availability and supply chain throughput will remain central factors governing how rapidly orders turn into recognized revenue.
Even with those caveats, Dell’s cash engine remains formidable. The company generated $2.23 billion in operating cash flow this quarter, while adjusted free cash flow reached $8.15 billion. It also paid back $4.3 billion to shareholders via buybacks and dividends, repurchasing 9.5 million shares at an average price of $401.
Wednesday’s market verdict was unambiguous. Wall Street no longer views Dell as a legacy PC vendor. It’s now pricing the company as an indispensable backbone of the global AI expansion, and if these numbers are any indication, that bet is paying off handsomely.
