Dell Technologies lifted its sales outlook for the fiscal year ending in January 2027 to about $167 billion and said roughly $60 billion will come from AI servers, a forecast that sent its shares up as much as 35% on Friday. The jump put the stock at a record high and marked its biggest intraday gain since March 2024.
For investors, the new numbers answered the question that has hung over Dell all year: whether demand for AI infrastructure could become large enough to reshape the business. The company’s prior revenue outlook was about $140 billion, and analysts had expected $142.1 billion, so the new target landed far above Wall Street’s view and helped explain the sudden rush into the stock.
The surge came after a quarter in which Dell booked $24.4 billion in AI orders and generated $16.1 billion in AI server sales. It also ended the period with a $51.3 billion backlog in AI server orders, giving the company a visible pipeline as customers from CoreWeave Inc. and Nscale Global Holdings Ltd., along with corporate clients and major AI providers, keep buying machines built to handle heavy AI workloads.
David Kennedy, speaking in a Television interview, said the shift from training AI models to using them creates a wider and more durable growth path for Dell over the long term. Jeff Clarke said the AI opportunity shows no signs of slowing, and Thursday’s outlook suggested the company believes that demand is still accelerating rather than cooling.
That optimism is running into a cost problem. Dell is trying to hold down expenses and improve margins as memory-chip prices rise rapidly, which means the company now has to prove that the AI boom can translate into profit, not just revenue. In the latest quarter, profit excluding some items was $4.86 a share, ahead of the average estimate of $2.99, but the bigger question is how much of the projected $167 billion in fiscal 2027 sales can flow through to the bottom line.
Dell’s broader business still helped. Fiscal first-quarter sales jumped 88% to $43.8 billion, well above analysts’ expectation of $35.5 billion, while the personal-computers unit posted a 17% gain in revenue to $14.6 billion and the traditional server division nearly doubled to $8.5 billion. The company also said the US military on Wednesday awarded it a $9.7 billion contract to help handle Microsoft Corp. software licenses, adding another line of business to a quarter already defined by AI.
By Friday, Dell’s stock was more than 150% higher than where it closed on Thursday, and the market is now focused on whether the company can keep turning that $51.3 billion backlog into revenue fast enough to justify the new valuation. The answer will come not from the size of the orders alone, but from how much of this AI surge Dell can convert into lasting profit.
