Dell Technologies Inc (NASDAQ:DELL) shares jumped 10% in after-hours trading Wednesday after the company posted second-quarter results that blew past Wall Street estimates and raised its full-year outlook, fueled by surging demand for AI-optimized servers.
The company reported fiscal second-quarter revenue of $47 billion, up 58% from a year earlier and above analyst estimates of $44.92 billion.
Adjusted earnings per share came in at $7.04, more than triple the year-ago figure and well ahead of the $4.91 consensus estimate.
Revenue from AI-optimized servers doubled year-over-year to $16.4 billion, topping the $16 billion estimate. Infrastructure Solutions Group (ISG) revenue rose 89% to $31.8 billion, ahead of the $29.8 billion estimate.
Dell raised its fiscal 2027 revenue guidance to $192 billion from a prior forecast of $167 billion, well above the $172.67 billion analysts had expected.
The company also lifted its AI-optimized server revenue outlook for the year to $74 billion from $60 billion, versus estimates of $65.8 billion. Adjusted EPS guidance for the year rose to $25.50 from $17.90, compared with a $18.90 estimate, while GAAP EPS guidance increased to $24.37 from $17.31.
For the third quarter, Dell guided for revenue of $49 billion, above the $41.42 billion estimate, with GAAP EPS of $6.10 and adjusted EPS of $6.50.
By segment, Traditional Servers & Networking revenue rose 122% to $10.5 billion, Storage revenue grew 26% to $4.9 billion, topping the $4.26 billion estimate, Commercial revenue increased 22% to $13.2 billion, and Consumer revenue rose 7% to $1.8 billion.
Dell reported orders of $60.9 billion and a backlog of $95 billion for the quarter. Operating income rose 204% to $5.4 billion, net income increased 255% to $4.1 billion, and adjusted free cash flow rose 224% to $8.1 billion.
"IT environments have shifted from cost centers to value drivers that fuel growth and competitive advantage, and customers are investing accordingly, creating opportunity across our portfolio," said Jeff Clarke, vice chairman and chief operating officer.