For years, Dell Technologies Inc. (DELL) was seen as a mature PC maker — a company tied to the slow, predictable cycle of corporate laptop upgrades. But after Thursday's earnings report, Wall Street is suddenly calling it something else: an AI infrastructure powerhouse.
If Nvidia Corp. (NVDA) supplies the brains of artificial intelligence and Micron Technology Inc. (MU) provides the memory, Dell is increasingly selling the body — the servers, racks and data-center systems that bring AI to life. And business is booming.
First-quarter revenue jumped 88% to $43.84 billion, far above the $35.43 billion analysts expected. Adjusted earnings came in at $4.86 a share, crushing the $2.94 consensus estimate. But one metric overshadowed everything else.
Dell sold approximately $16.1 billion worth of AI-optimized servers during the quarter, according to Goldman Sachs estimates, up 757% from a year earlier. The stock jumped nearly 35% in premarket trading Friday, putting Dell on track to add more than $81 billion in market value in a single session.
Why One Number Repriced The Stock
An AI server is not just a computer. It's a rack-scale system packed with advanced processors, networking gear and memory, designed to train and run large language models and other AI workloads. Most are built around Nvidia's latest AI chips and sold to hyperscalers, cloud providers and enterprises racing to deploy artificial intelligence.
Dell's AI orders reached $24 billion, while backlog climbed to $51.3 billion, suggesting demand is still outstripping available supply. Management responded by raising its fiscal 2027 AI server revenue forecast to $60 billion from $50 billion.
The implications are significant. Dell was previously viewed as a company tied to the slow-moving PC replacement cycle. Instead, investors discovered a business with one division growing at rates more commonly associated with early-stage software companies. The company's full-year outlook was lifted accordingly. Dell now expects fiscal 2027 revenue of $165 billion to $169 billion, up from a prior forecast of $138 billion to $142 billion, while non-GAAP earnings guidance jumped by $5 per share at the midpoint.
Wall Street Scrambles To Catch Up
Analysts are racing to update their models. Melius raised its price target from $380 to $565, the highest target on Wall Street, arguing that Dell exceeded expectations across virtually every business line, from AI servers and traditional servers to storage and PCs. The firm estimates that AI servers will account for roughly 36% of the company's sales this year.
BofA boosted its target from $280 to $500, citing accelerating demand for AI servers, growing enterprise adoption of agentic AI applications and expanding cloud-service-provider deployments. Analysts said Dell's sales pipeline is building "above historical norms" as AI spending broadens beyond hyperscalers.
Piper Sandler raised its target from $167 to $497, highlighting that Dell's backlog and pipeline are growing faster than reported sales and noting that the company has already secured supply commitments for the remainder of the year.
Goldman Sachs called AI server momentum the highlight of the quarter, noting that Dell generated $24 billion in AI orders despite already reporting record shipments. The bank said the company's raised guidance reflects roughly $10 billion of additional AI server revenue expectations compared with prior forecasts.
Dell's transformation from PC maker to AI infrastructure champion is happening in real time. And Wall Street is finally paying attention.
