Dell shares jump 39% after server maker reports fastest sales growth since return to public market in 2018
Dell Technologies (DELL) shares surged following robust fiscal 2026 fourth-quarter results and an optimistic forecast for its artificial intelligence (AI) server business. The company's projections for AI server revenue, expected to double in fiscal 2027, contributed to significant stock gains.
Shares of Dell Technologies climbed, with Investopedia reporting a 20% rise in morning trading on a Friday after the company surpassed analysts' estimates for its fiscal 2026 fourth quarter. Reuters reported a 17.5% jump on a separate Friday after Dell forecast its AI server business revenue would double in fiscal 2027.
For its fiscal year 2026, Dell reported adjusted earnings that rose 27% to $10.30 per share, while sales advanced 19% to $113.5 billion, according to Investors.com.
The company has significantly increased its annual revenue growth target, raising the figure from 3% to 4%, then to 7%, and finally to 9%, MarketBeat reported. This forecast is based on Dell's belief that more companies will invest in their AI infrastructure.
Dell's AI-optimized server orders reached $64 billion, with a record backlog of $43 billion, Investopedia stated. The company expects AI server revenue to grow 103% to approximately $50 billion in fiscal 2027, Reuters reported.
Vice chairman and COO Jeff Clarke stated in a prior period, "We grew our Infrastructure Solutions Group revenue by 22 percent, and we’re well positioned to capture growth across every segment of our business." He added, "Our prospects for AI are strong as we extend AI from the largest cloud service providers into the enterprise at scale, and out to the edge with the PC."
Clarke also noted that deals with xAI and other entities put Dell's AI server backlog at roughly $9 billion as of January 31, 2025. J.P.Morgan analysts, led by Samik Chatterjee, highlighted Dell's leadership position in AI compute for Tier 2 Cloud and Enterprises.
Looking back, for the quarter ended January 31, 2025, Dell reported $23.9 billion in revenue, up 7% year-over-year, with GAAP profit jumping 27% to $1.53 billion. Full fiscal year 2025 revenues were $95.6 billion, an 8% increase year-over-year, and profit leaped 36% to $4.58 billion.
In the same period, Commercial Client Solutions Group (CSG) sales rose 5% year-over-year to $10 billion, while consumer sales dropped 12% to $1.9 billion. Dell also noted its second consecutive quarter of storage revenue growth at +5% year-over-year, with record PowerStore demand seeing double-digit growth.
In addition to its strong performance and outlook, Dell announced a $10 billion buyback plan and a 20% dividend increase, according to Investopedia. Dell Technologies shares have been performing well in 2025, significantly outpacing the approximately 13.5% return of the S&P 500 Index.