Enterprise Demand for AI-Optimized Servers Drives Revenue Growth for Dell and HPE

Dell and HPE have reported revenue gains from growing enterprise demand for AI-optimized servers, despite economic uncertainty raised by US tariffs. Dell's server and networking segment revenues reached a record high, increasing 69% YoY to $12.9 billion. HPE saw revenues grow 18% YoY to $9.1 billion. The demand surge is attributed to enterprises refreshing aged infrastructure with more richly configured servers, driven by the evolution of AI from simple chatbots to reasoning models to agentic AI.

Dell Technologies and Hewlett Packard Enterprise (HPE) have reported significant revenue gains in the second quarter of 2026, driven by growing enterprise demand for AI-optimized servers. Despite economic uncertainty raised by U.S. tariffs, both companies experienced robust growth in their server and networking segments.

Dell's server and networking segment revenues reached a record high, increasing 69% year-over-year (YoY) to $12.9 billion. The company's Chief Operating Officer, Jeff Clarke, noted that Dell has shipped more AI servers in the first half of 2026 than all of last year combined. This growth is attributed to enterprises refreshing their aged infrastructure with more richly configured servers, driven by the evolution of AI from simple chatbots to reasoning models to agentic AI [1].

HPE also saw revenues grow 18% YoY to $9.1 billion. The company's CEO, Antonio Neri, stated that customers are refreshing their aged infrastructure with more richly configured servers. HPE has seen enterprise server procurements grow year-over-year every quarter since the beginning of its 2024 fiscal year [1].

The demand surge is tied to high investment levels in AI hardware, including servers. According to IDC, server sales saw an unprecedented sales spike during the first three months of 2025, increasing 134% YoY to $95.2 billion. This was the largest quarterly growth the market has experienced in 25 years [1].

Gartner expects end-user spending on servers to grow to $367 billion this year, marking a nearly 60% spike compared to 2024. The growth spurt is tied to high investment levels in AI hardware, including servers. "Data centers are experiencing a surge driven by Gen AI, with spending on AI optimized servers, which was virtually nonexistent in 2021, expected to triple that of traditional servers by 2027," said John-David Lovelock, Gartner distinguished VP analyst [1].

Cloud providers were the largest driver of data center investments last year, according to Dell’Oro Group research. The 10 largest hyperscalers accounted for more than half of $455 billion spent on infrastructure in 2024, as the total market grew 51% YoY [1].

References:

[1] https://finance.yahoo.com/news/dell-hpe-reap-revenue-gains-160806804.html