Dell Technologies shares staged a dramatic reversal in after-hours trading Tuesday after the company delivered fiscal second-quarter results that crushed Wall Street expectations and revealed another surge in artificial intelligence infrastructure demand.
Dell reported adjusted earnings of $7.04 per share on revenue of $46.97 billion, which is comfortably ahead of analyst expectations for $4.92 per share and $44.92 billion in revenue. Revenue increased 58% year over year, while net income jumped to $4.13 billion from $1.16 billion a year earlier.
Press release from Dell
The biggest catalyst was Dell's expanding AI server business. The company booked a record $60.9 billion in AI server orders during the quarter, generated $16.4 billion in AI-optimized server revenue and exited July with a record $95 billion AI backlog.
Demand also appears to be growing. Dell said its AI infrastructure customer base has surpassed 6,500, with roughly 3,300 customers added during the past three quarters. The company converted $131.7 billion of AI demand into orders over the past 12 months, while its pipeline is still several times larger than its backlog.
That momentum prompted Dell to raise its fiscal 2027 AI-optimized server revenue forecast to $74 billion from $60 billion. The company also lifted its overall full-year revenue forecast to $192 billion and adjusted EPS guidance to $25.50.
Importantly, Dell is showing that the AI boom can translate into stronger profitability as well as sales. Infrastructure Solutions Group operating income surged 225% to $4.78 billion, with its operating margin climbing to 15% from 8.8% a year earlier. Infrastructure revenue reached $31.8 billion, including $10.5 billion from traditional servers and networking and $4.9 billion from storage.
Dell Stock Erases Its Pre-Earnings Selloff
Dell stock had an unusually volatile 24 hours. Shares closed Tuesday at $425 after plunging to $31.90, or 6.98%, during regular trading.
That decline was quickly reversed. Dell stock jumped 8.01% to $459.03 in after-hours trading following the results. At that level, the shares were actually about 0.5% above their previous closing price of $456.91, effectively wiping out the entire regular-session loss.
Dell stock price (Source: CoinCodex)
With Dell now sitting on a $95 billion AI backlog and sharply higher guidance, investors will be watching whether the company can continue converting enormous AI infrastructure demand into revenue and earnings.
