Dell Technologies shares surged more than 10% in after-hours trading following the release of a quarterly report that exceeded even the boldest expectations. Adjusted earnings per share came in at $7.04 versus the analyst consensus forecast of $4.90 — a powerful signal that the company managed not only to grow revenue but also to effectively monetize its AI segment.
Revenue for the reporting period jumped 58% year-over-year, reaching $46.97 billion. After the release, shares traded around $469.66, sharply contrasting with the close of the regular session at $424.20 — the 6.98% decline before the report was driven by profit-taking and trader nervousness ahead of expected volatility.
Why shares fell before the report
Throughout the trading day before the release, sellers dominated the market. Options expiring on Friday priced in an 11% swing, and the after-hours movement almost perfectly matched that forecast, showing a 10.59% gain. Interestingly, the company itself had previously been cautious about its outlook: in May, management projected revenue of $44–45 billion and earnings of $4.80 per share. The caution was explained not by weak demand but by margin pressure: rising memory prices in 2024 and structurally lower profitability of AI servers compared to traditional storage systems and enterprise PCs.
AI boom: order backlog hits record $95 billion
Sales of servers optimized for artificial intelligence doubled year-over-year, reaching $16.4 billion. However, the key metric is the volume of new orders. During the quarter, Dell received AI server orders worth $60.9 billion, while the total backlog of unfilled orders soared to a record $95 billion. For comparison: three months ago, this figure stood at $51.3 billion. Demand for AI equipment continues to significantly outpace physical shipments, confirming the structural nature of the boom.
For the second consecutive quarter, management has raised its annual guidance. The company now expects revenue of approximately $192 billion and adjusted earnings of $25.50 per share — previously, forecasts were $167 billion and $17.90, respectively. Particularly telling is the upgrade to the AI server plan: revenue of nearly $74 billion is now expected, whereas in May the figure was $60 billion. For the third quarter, Dell is guiding for roughly $49 billion in revenue and $6.50 in earnings per share.
The market has not yet fully priced in these expectations: shares are trading only 3% above Monday's close ($456.01), suggesting significant potential for further growth. Key questions for investors are the pace of converting the backlog into actual shipments and the availability of components, especially memory. Dell's stock rally in 2026 has already lifted shares from around $110 to an all-time high of $514, and now the market views the company as one of the biggest beneficiaries of the AI revolution.
My take: The current figures confirm that Dell has transformed from a classic PC manufacturer into a key infrastructure player of the AI era. However, the main risk is the company's ability to maintain margins amid intense competition and component shortages. Investors should closely watch the conference call, where management is expected to clarify plans for ramping up shipments and managing costs.