Dell Technologies (DELL) announced its fiscal first-quarter results for the period ended May 1 on May 28. Revenue in the quarter was $4.384 billion, AI server revenue was $16.1 billion, and adjusted earnings per share were $4.86. After the results were released, Dell shares briefly rose 39% in after-hours trading, reaching a high of $443.86; ahead of the close, they were $317.05.
Confirmed Q1 and FY2027 full-year financial data
Dell’s Infrastructure Solutions Group (ISG, servers and data center equipment) saw Q1 revenue up 181% year over year to $29.0 billion, beating StreetAccount’s expectation of $22.4 billion; Client Solutions Group (PC business) saw Q1 revenue rise 17% year over year to $14.6 billion, beating the forecast of $12.8 billion.
Net profit in Q1 tripled to $3.44 billion, or $5.24 per share ($965 million, or $1.37 per share, in the same period last year). FY2027 Q2 guidance: adjusted EPS of $4.80, revenue of $44.0 billion to $45.0 billion (analysts previously expected EPS of $2.98 and revenue of $34.97 billion); full-year guidance: adjusted EPS of $17.90, versus analysts’ prior expectation of $13.09.
Confirmed statements from Jeff Clark and David Kennedy
COO Jeff Clark said on the earnings call, “There are absolutely no signs of slowing down in opportunities in the artificial intelligence space.” Clark also noted that Q1 AI order volume was $24.4 billion, with a backlog at quarter-end of $51.3 billion, and confirmed that Dell currently has more than 5,000 AI server customers, including cloud computing power leasing companies such as CoreWeave and Nscale Global Holdings, as well as enterprise customers.
CFO David Kennedy said in an interview with Bloomberg TV that as customers shift from training AI models to using AI models, this creates more opportunities for Dell beyond AI servers: “This will bring us broader, more durable, long-term growth.”
Memory price pressure and supply-chain conditions
Clark said the company raised product prices in January to reflect cost increases driven by memory shortages, adding that the firm “feels like it’s repricing every day,” and confirmed it is facing shortages of standard CPUs, hard drives, and other products.
Clark also confirmed that Dell expects to face tight supply in the second half of FY2027. On May 27, the Pentagon announced it would award Dell a five-year contract worth $9.7 billion for Microsoft 365 productivity services.
FAQ
By how much did Dell’s Q1 results exceed analysts’ expectations?
Adjusted EPS in Q1 was $4.86, beating analysts’ estimate of $2.94 by 65%; Q1 revenue was $43.84 billion, beating the expected $35.43 billion by 24%; ISG’s results exceeded StreetAccount’s expectation of $22.4 billion by about 29%.
By how much was Dell’s FY2027 full-year AI server target raised?
Dell’s FY2027 full-year AI server target was raised from the $50.0 billion forecast made in February this year to $60.0 billion, a year-over-year increase of 144% (calculated against roughly $24.6 billion in the prior fiscal year).
What is the nature of the Pentagon’s $9.7 billion contract?
The Pentagon (U.S. Department of Defense) announced on May 27 that it awarded Dell a five-year, $9.7 billion contract for Microsoft 365 productivity services, giving Dell a diversified source of revenue beyond AI and enterprise applications.
