Dell Technologies 2026 Q2 Earnings Strong Performance as Net Income Rises 32%

Dell Technologies (DELL) delivered robust financial results for fiscal 2026 Q2, significantly beating expectations. The company raised full-year revenue guidance and highlighted exceptional growth in AI server shipments. Operating execution and strong demand for AI solutions underscored the quarter’s success, with management expressing confidence in continued momentum in the second half of the year.

Revenue
Dell Technologies posted a 19.0% year-over-year increase in total revenue, reaching $29.78 billion in fiscal 2026 Q2. The Infrastructure Solutions Group (ISG) led the growth, generating $16.80 billion in revenue, driven by a 69% surge in Servers and Networking revenue to $12.9 billion. The Client Solutions Group (CSG) contributed $12.50 billion in revenue, with Commercial Client revenue up 2% to $10.8 billion, while Consumer revenue declined 7% to $1.7 billion. Storage revenue stood at $3.9 billion, down 3% year over year. The Corporate and Other segment added $473 million, while Amortization of intangibles, Stock-based compensation expense, and Other corporate expenses remained at $0. Total consolidated net revenue reached $29.78 billion.

Earnings/Net Income
Dell Technologies reported a 36.3% year-over-year increase in diluted EPS to $1.71 in fiscal 2026 Q2 from $1.26 in the prior year. Net income also rose by 32.0% to $1.16 billion, up from $882 million. The company’s profitability and strong cash generation reflect continued operational efficiency and market demand for its core offerings.

Price Action
The stock price of Dell Technologies edged up 0.26% during the latest trading day, climbed 4.87% during the most recent full trading week, and rose 0.40% month-to-date. Investors appear to be responding positively to the earnings beat and improved guidance.

Post Earnings Price Action Review
A strategy of buying DELL shares 30 days after the earnings release date following a quarter-over-quarter revenue increase over the past three years delivered strong returns. This strategy achieved a CAGR of 54.61% and an excess return of 159.72% compared to the benchmark, with a maximum drawdown of 0.00% and a Sharpe ratio of 1.01. These metrics indicate robust risk-adjusted performance, suggesting a favorable investment approach post-earnings.

CEO Commentary
Jeff Park, Executive at Dell Technologies, noted a strong operational execution in Q2, highlighted by record AI shipments. He emphasized robust demand for AI servers, with $5.6 billion in orders and $8.2 billion in shipments, while noting challenges in North America’s traditional server demand. Park expressed optimism about modernization efforts and the growth potential in AI and Dell IP storage. He emphasized the importance of capital returns and innovation, stating, “Our innovation engine is firing on all cylinders, and the opportunity is showing no signs of slowing down.”

Guidance
Dell Technologies expects Q3 revenue to be between $26.5 billion and $27.5 billion, with diluted non-GAAP EPS of $2.45 ± $0.10. For FY 2026, the company raised its revenue guidance to $105 billion–$109 billion, with non-GAAP EPS of $9.55 ± $0.25. ISG is expected to grow mid to high 20s, driven by AI, while CSG is projected to grow low to mid single digits. Operating expenses are expected to decline slightly, and operating income is anticipated to increase roughly 10%. The guidance assumes a 12% revenue growth at the midpoint and an 18% non-GAAP tax rate for the year.

Additional News
Dell Technologies returned $1.3 billion to shareholders in the second quarter through share repurchases and dividends, reflecting its commitment to capital returns. The Infrastructure Solutions Group reported record revenue of $16.8 billion, up 44% year over year, with Servers and Networking revenue surging 69%. The Client Solutions Group reported $12.5 billion in revenue, up 1% year over year, with Commercial Client revenue rising 2% and Consumer revenue falling 7%. Guidance for FY2026 was raised, with revenue expected to range from $105.0 billion to $109.0 billion, up 12% at the midpoint, and non-GAAP diluted EPS at $9.55, up 17% year over year.