Dell's AI Server Orders Surge 121% Year-Over-Year to $12.1 Billion

Dell Technologies, a prominent technology company specializing in PC and high-performance server products, reported a substantial increase in AI server orders. The value of AI server orders for the quarter ending May 2 exceeded the total outbound value for the entire 2025 fiscal year, reaching 12.1 billion dollars. This surge in demand highlights the growing importance of AI infrastructure in the tech industry. Dell's Chief Operating Officer, Jeff Clarke, noted that the company's backlog of unfulfilled orders reached 14.4 billion dollars, underscoring the rapid adoption of AI technologies across various sectors and the need for advanced server solutions.

Dell's strong performance in the AI server market is driven by the increasing demand for high-performance AI servers from major clients, including xAI, led by Elon Musk, and CoreWeave Inc., backed by NVIDIA. The company's ability to meet this demand will be crucial in maintaining its competitive edge. The surge in AI server orders reflects a broader trend in the tech industry, where companies are increasingly investing in AI infrastructure to support their digital transformation initiatives. This trend is expected to continue, driving further growth in the AI server market. Dell's strong performance in this area positions the company well to capitalize on this growing demand, as it continues to innovate and expand its AI server offerings.

Dell's financial outlook for the fiscal year ending January 2026 is also positive. The company expects earnings per share, excluding certain items, to be approximately 9.40 dollars, higher than the previous forecast of 9.21 dollars. Dell reaffirmed its annual sales forecast of 103 billion dollars, with a range of 101 billion to 105 billion dollars. This outlook exceeds analyst expectations, indicating strong growth in the AI server market and Dell's ability to capitalize on this trend.

In the first quarter of the 2026 fiscal year, Dell's total revenue grew by 5% year-over-year to 23.4 billion dollars, surpassing analyst estimates of 23.1 billion dollars. Adjusted earnings per share, excluding certain items, were 1.55 dollars, a 17% increase year-over-year, although slightly below analyst estimates of 1.69 dollars. This strong performance is driven by the increasing demand for AI servers, which is expected to continue throughout the year.

Dell's management team is optimistic about the company's prospects in the AI server market. They expect earnings per share for the second quarter to be approximately 2.25 dollars, with revenue of approximately 29 billion dollars, both higher than analyst estimates. The company also expects operating expenses to decrease by a low single-digit percentage. Dell's strong performance in the AI server market is expected to continue, driving further growth in the company's earnings and revenue.

Despite the strong demand for AI servers, Dell faces challenges in its PC business. The company's consumer PC sales, which focus on high-end and gaming devices, were weaker than expected in the first quarter, leading to a 19% decline in revenue. The company's Client Solutions Group, which includes both consumer and commercial PCs, saw a 16% decline in operating profit. This decline is due to increased competition and pricing pressure, as well as the impact of tariffs on the company's supply chain. However, Dell's management team is confident that the strong demand for AI servers will offset these challenges and drive continued growth in the company's earnings and revenue.