Dell Climbs 9% After Booking Record AI Server Orders

Dell Technologies rose about 9% in Wednesday afternoon trading, a day after the computer maker posted record quarterly revenue and profit and lifted its forecast for the year. The stock changed hands in the low $460s, up from Tuesday’s close of $425. Volume ran heavy.

The AI-server business set new records

For its fiscal second quarter, Dell reported revenue of $47.0 billion, up 58% from a year earlier. Non-GAAP earnings came in at $7.04 a share, more than triple the year-ago figure, and GAAP earnings were $6.34. Both lines cleared Wall Street’s estimates by a wide margin.

The engine was artificial-intelligence hardware. Dell booked $60.9 billion in AI server orders during the quarter and closed the period with a backlog of $95 billion, each a company record. AI-optimized servers brought in $16.4 billion of revenue, double the same quarter a year ago. The Infrastructure Solutions Group, the division that houses those machines, grew 89% to $31.8 billion. The Client Solutions Group, its PC arm, rose 20% to $15.0 billion.

A bigger number for the full year

Then management raised the bar. Dell now expects full-year revenue of $192 billion at the midpoint, $25 billion above its prior guidance and up 69% from last year, with $74 billion of that tied to AI servers. It lifted its full-year adjusted earnings outlook to $25.50 a share. For the current quarter the company guided to $49.0 billion in revenue and $6.50 in adjusted profit, both well ahead of year-earlier levels. Vice Chairman and Chief Operating Officer Jeff Clarke pointed to the record orders and backlog as the clearest sign of accelerating demand.

The move stood out against a quiet stretch

The advance broke a sleepy run for the shares. Dell had been little changed over the past month and slightly lower over three months going into the report, even after more than tripling over the past year. A year earlier the shares traded at $121. Wednesday’s gain came on volume running close to four times the recent daily average. In the low $460s, the stock sits about 10% under its 52-week high of $514. The rally was not Dell’s alone. Hewlett Packard Enterprise rose about 4% and Super Micro Computer added around 1% as the read-through spread to other server makers.

Now the backlog has to convert to revenue

The orders are on the books. The question from here is how fast that $95 billion backlog turns into shipped revenue, and whether Dell can source enough chips and power to build the machines. The company’s own guidance implies AI-server sales stepping up as the year goes on. Dell’s next quarterly report, covering the period through October, is due in late November and will show the first installment. Investors will also watch component supply and profit margins on the large AI deals. The session still had hours to run when the stock was trading up 9% on Wednesday afternoon.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.