Dell Technologies Inc. (NYSE: DELL) shares surged 38% in premarket trading Friday after the company delivered an annual revenue outlook that dramatically exceeded analyst expectations.
The Texas-based hardware maker projected fiscal year revenue ending January 2027 at approximately $167 billion, including $60 billion attributed to AI server sales alone.
That figure represents a significant jump from Dell’s prior revenue outlook of approximately $140 billion and blew past the analyst consensus estimate of $142.1 billion, according to Bloomberg data.
Dell’s AI-optimized servers are drawing customers from cloud computing rental companies such as CoreWeave Inc. and Nscale Global Holdings Ltd., as well as corporate clients and major AI providers.
Chief Operating Officer Jeff Clarke stated the company booked $24.4 billion in AI orders and generated $16.1 billion in AI server sales during the quarter ended May 1.
Clarke offered a confident summary of the company’s market position, stating plainly: “The AI opportunity shows no signs of slowing.”
Dell shares rose to $437.70 in early trading after closing at $317.05, which would represent the stock’s largest single-day gain in more than two years if it held through the session.
For the fiscal first quarter, Dell reported sales jumping 88% to $43.8 billion, compared with the analyst average estimate of $35.5 billion, with traditional CPU-focused servers also contributing strongly.
That traditional server division nearly doubled its revenue to $8.5 billion in the quarter compared with the same period a year prior, while Dell closed the quarter with an AI server order backlog of $51.3 billion.
Chief Financial Officer David Kennedy highlighted that the shift from training AI models to deploying them creates demand for a broader range of Dell products beyond just AI servers.
Kennedy stated on Bloomberg Television: “That makes it a more broad-based durable growth over the long term for us.”
Excluding certain items, profit came in at $4.86 per share for the quarter, well above the analyst average estimate of $2.99 per share.
On Wednesday, the US military announced it would award a $9.7 billion contract to Dell for assistance managing licenses for Microsoft Corp. (NASDAQ: MSFT) software.
Evercore ISI analyst Amit Daryanani wrote that the military deal “provides Dell with diversity of growth beyond AI and enterprise.”
Dell’s personal computer business unit posted a 17% revenue gain to $14.6 billion, led by business sales, ahead of the analyst consensus estimate of $12.9 billion.
