Dell Technologies Inc (NASDAQ:DELL) gave investors something to cheer about this week despite falling short of quarterly profit expectations. The US computer giant’s adjusted earnings per share for the first quarter came in at $1.55, below the $1.69 forecast by analysts.
However, revenue rose 5% year on year to $23.38 billion, just ahead of expectations, and it was the outlook that really stole the show.
Dell now expects adjusted earnings of $2.25 per share in the current quarter, with revenue between $28.5 billion and $29.5 billion, well ahead of what the market had been pricing in.
The upgrade was driven by soaring demand for its artificial intelligence (AI) systems, which are proving significantly more profitable than traditional hardware.
AI is no longer hype, it is orders
A standout number was the $14.4 billion of confirmed AI-related orders in Dell’s backlog.
These are contracts for servers and computing infrastructure that customers have agreed to purchase, but which haven’t yet been delivered or invoiced. In the first quarter alone, Dell booked $12.1 billion in new AI orders.
Dell builds servers that incorporate Nvidia’s graphics processing units, specialised chips designed for the heavy computing tasks that underpin AI applications.
Demand is particularly strong among smaller cloud service providers that are racing to keep up with tech giants like Amazon and Microsoft.
That activity is showing up in Dell’s Infrastructure Solutions Group, which houses its server and storage business. The division reported $10.3 billion in revenue for the quarter, up 12%. Of that, $6.3 billion came from servers and networking, while $4 billion was from data storage.
PCs recovering but focus is shifting
Dell’s traditional bread-and-butter business, selling laptops and desktop PCs, is also showing signs of recovery.
Its Client Solutions Group recorded $12.5 billion in revenue, helped by a stabilising global PC market after several difficult years. But growth here is slow compared to the AI-powered boom in enterprise infrastructure.
The company expects total revenue to grow 8% over the full fiscal year, with sales forecast to hit around $103 billion, broadly in line with earlier expectations. However, it has nudged up its full-year earnings forecast to $9.40 per share, from $9.30 previously.
What it means for investors
Alongside stronger guidance, Dell has also been returning more cash to investors.
It spent $2.4 billion on share buybacks and dividends during the quarter alone, with repurchases for the fiscal year already exceeding the total for all of the previous year.
With confirmed AI demand, a fast-expanding server business, and a recovering PC division, Dell is increasingly positioning itself as a key infrastructure provider for the AI era.
For investors, the message is clear: this is no longer just a hardware stock; it is a company riding the biggest structural trend in enterprise technology today.