Shares of Dell Technologies climbed another 4.6% to €470.80 on September 10, extending a rally that has added roughly 24% since the Sept. 1 earnings report. The catalyst: a quarter so strong it forced the company to lift its full-year revenue forecast by $25 billion in a single stroke. For shareholders, the question is no longer whether Dell belongs in the AI infrastructure conversation — it's whether the stock price already reflects a future that still depends on converting a mountain of orders into actual profit.
- A Single Quarter Produced More Orders Than an Entire Prior Year of Revenue
Dell booked a record $60.9 billion in AI server orders and exited the quarter with a $95 billion backlog.
To put that in perspective: Dell's entire fiscal 2026 revenue was $113.5 billion. That backlog — confirmed orders waiting to be built and shipped — gives Dell unusual revenue visibility stretching multiple quarters ahead. Management raised its full-year fiscal 2027 revenue target to $192 billion , with the AI server revenue forecast lifted to $74 billion from $60 billion, and adjusted EPS guidance raised to $25.50 from $17.90.
- Revenue Doubled, and This Time Margins Actually Improved
Total revenue hit $47 billion, up 58% year over year.
Adjusted earnings per share came in at $7.04, up 203% from $2.32 a year earlier. Crucially, the lingering concern that AI servers — which carry thinner profit margins because expensive GPU chips eat up most of the sale price — would drag overall profitability did not materialize. ISG operating margin jumped from 10.5% in Q1 to 15.0% in Q2, while company-wide gross margin recovered from 18.1% to 21.1%. That improvement silenced, at least temporarily, bears who argued Dell was simply moving boxes at cost.
- The Backlog Is a Strength — and a Supply-Chain Stress Test
The widening gap between orders and shipments points to sustained demand but also highlights the manufacturing, component-supply, and data center readiness work required to convert large AI contracts into operating infrastructure.
Free cash flow fell 47% to $986 million even as adjusted free cash flow reached $8.1 billion — a divergence tied to the massive working capital needed to fund inventory build-outs ahead of delivery.
- Valuation Has Caught Up to Expectations
Shares trade at roughly 26 times adjusted earnings guidance — a full price for a hardware company, and one that assumes AI growth stays profitable. The sharply higher guidance raises the bar for future execution at a time when component supply and pricing pressure remain in focus. Dell has earned its seat at the AI table. Now it has to prove it can keep margins rising as fast as the backlog.