Dell Technologies shares surged after the company released fiscal 2026 results that exceeded Wall Street expectations. The Round Rock‑based technology firm reported fourth‑quarter revenue of US$33.4 billion, an increase of 39% over the prior year. Adjusted earnings per share reached US$3.89, also ahead of consensus estimates.
In its earnings release, Dell said full‑year revenue for fiscal 2026 reached a record US$113.5 billion, up 19% from the previous year. The company forecasts full‑year revenue growth of about 23% at the midpoint for fiscal 2027, projecting between US$138 billion and US$142 billion in sales. This guidance implies annual earnings per share of about US$12.90 on a non‑GAAP basis, well ahead of analyst expectations.
The strong numbers prompted a swift rally in the stock price. Shares gained around 20% in morning trading following the announcement, pushing the stock near multi‑year highs. Investors reacted not only to the revenue beat but also to the company’s commitment to returning capital to shareholders.
Dell’s board authorized a new US$10 billion share repurchase plan and raised the annual cash dividend by 20%. During fiscal year 2026, the company returned US$7.5 billion to shareholders through buybacks and dividends. Such moves support earnings per share even if market conditions become less favorable.
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Management emphasized that AI‑optimized servers were the primary driver of the revenue surge. Chief operating officer Jeff Clarke said the “AI opportunity is transforming our company” after Dell closed more than US$64 billion in orders for AI‑optimized servers during fiscal 2026.
The company shipped over US$25 billion worth of these specialized servers during the year and entered fiscal 2027 with a record backlog of US$43 billion. Fourth‑quarter AI‑optimized server revenue rose 342% year‑on‑year to US$9.0 billion, while infrastructure solutions group revenue climbed 73% to US$19.6 billion. Dell now counts more than 4,000 customers for its AI servers.
The company expects this momentum to continue. For fiscal 2027, Dell forecasts AI‑optimized server revenue of about US$50 billion, implying growth of 103%. The guidance suggests that Dell aims to more than double annual sales in this segment as corporations and cloud providers invest heavily in AI data‑center capacity.
Analysts responded favorably to the results. Several brokerage firms raised their price targets, noting Dell’s ability to convert AI demand into profitable growth while maintaining flexibility on margins.
Jeff Clarke acknowledged that some customers initially experienced “sticker shock” due to elevated component prices but quickly shifted their focus to securing supply. Portfolio manager Hendi Susanto of Gabelli Funds said Dell was getting ahead of rising memory costs, which have squeezed competitors.
Despite the optimism, analysts cautioned that Dell’s rally leaves less room for error. Rising memory prices could compress margins if costs cannot be passed on to customers. Dell recently raised server prices in response to a surge in memory chip costs. In addition, the company faces stiff competition from rivals such as Super Micro Computer and HP Inc.
While infrastructure solutions drove most of the growth, Dell’s client solutions group—which includes PC sales—grew only 14% in the quarter, suggesting that consumer demand remains subdued. A slowdown in AI infrastructure spending or supply constraints could weigh on future results.
Looking ahead, the market will watch for evidence that AI demand remains robust and that component costs stabilize. Dell’s first‑quarter fiscal 2027 outlook calls for revenue between US$34.7 billion and US$35.7 billion and adjusted earnings per share of about US$2.90. If the company delivers on its aggressive guidance and continues to return capital to shareholders, investors may reward the stock accordingly.