Dell Technologies surged past Wall Street expectations with $43.84 billion in fiscal first-quarter revenue, driven by unprecedented demand for AI servers. Founder Michael Dell’s company lifted its full-year revenue outlook to $167 billion while battling supply constraints that continue to test its server delivery capacity heading into the second half of the year.
The numbers arrive as the technology giant’s stock has skyrocketed 272% year-to-date, propelled by exceptional demand for artificial intelligence infrastructure and advanced data center equipment.
Infrastructure Solutions Group Drives Record Orders and Backlog
The Infrastructure Solutions Group division anchored the quarter’s performance once again, fueled by enterprise clients, neocloud infrastructure providers, and sovereign entities ordering AI-optimized servers. During the preceding first quarter, Dell secured $24.4 billion in AI-related orders while recording $16.1 billion in AI server sales, leaving the company with a massive $51.3 billion AI backlog.
Conventional server sales also remained robust as major enterprise clients modernized computing infrastructure. Storage business segments delivered substantial contributions to overall profitability beyond pure revenue generation, further bolstering the ISG division.
Supply Constraints Overshadow Surging AI Demand
Despite the explosive revenue expansion, executives emphasized that growth is currently limited by manufacturing capacity rather than customer interest. Chief Operating Officer Jeff Clarke addressed investors directly regarding the market dynamics.
“We have a supply issue. We are supply constrained in the second half. It is not a demand issue for us.”
Jeff Clarke, Dell operating chief
Gross margins compressed during the broader AI infrastructure rollout, dropping to 17.8% from 21.1% in previous comparisons. However, Chief Financial Officer David Kennedy noted that excluding the impact of AI mix, our gross margin outlook is better than it was 90 days ago
as the company optimized the bits and bytes toward the infrastructure business after spotting softening in the traditional PC market earlier in the year.
Full-Year Guidance Raised as Optimism Outpaces Wall Street
Reflecting accelerating momentum across the portfolio, Dell ratcheted up its full-year guidance significantly. The company now projects adjusted earnings of $18.6811 per share on $167 billion in total revenue, marking a substantial increase over prior expectations. Analysts surveyed by LSEG had previously anticipated $17.90 per share on $167 billion in revenue.
For the fiscal second quarter, Dell called for $4.8994 in adjusted earnings per share on $44.44B in revenue, implying 81% year-over-year growth. While CFO David Kennedy stressed that management has increased expectations for the second half while maintaining an appropriate level of prudence,
the raised targets establish high expectations as Dell navigates its supply chain limitations through the remainder of fiscal 2027.