Technology

Dell reports record revenue driven by booming AI server demand and raises full-year outlook

Friday, 28 November 2025 10:48AM UTC

Dell Technologies has announced its third-quarter fiscal 2026 results, revealing record revenues of $27.01 billion driven by surging demand for AI infrastructure, alongside an upgraded full-year outlook signalling confidence in its strategic expansion into AI and enterprise solutions.

Dell Technologies has reported impressive financial results and raised its full-year outlook, driven primarily by surging demand for AI servers and infrastructure. In its third-quarter fiscal 2026 results, the company posted record revenue of $27.01 billion, marking an 11% increase from the previous year, alongside a net income of $1.55 billion, a 32% rise. Operating income also grew by 23% to $2.12 billion. Reflecting its confidence in ongoing growth, Dell announced a 20% increase in its annual cash dividend to $1.78 per share, signalling a commitment to shareholder returns.

Central to Dell’s growth trajectory is its booming AI server business, highlighted by a record $12.3 billion AI server order backlog at the end of the third quarter, with shipments reaching $5.6 billion for that period. The company now forecasts AI server revenue of $25 billion for fiscal 2026, up from an earlier estimate of $20 billion. This surge in demand has been fuelled by major contracts with key clients, including the U.S. Department of Energy, Abu Dhabi’s G42, Elon Musk’s AI startup xAI, and CoreWeave. Dell’s expanding partnerships in AI and supercomputing, particularly involving Nvidia’s advanced chips, underline the strategic role of AI in the company’s business model.

Recent product innovations support Dell’s AI push, as unveiled at the SC25 supercomputing conference. The introduction of specialized AI-optimised servers powered by AMD and Intel, alongside high-capacity networking switches, enhances Dell’s data centre capabilities tailored for AI workloads. Additionally, the expansion of the Dell AI Factory, integrating Nvidia’s hardware and software frameworks, aims to improve automation and performance for enterprise AI applications. These advances demonstrate Dell’s intent to differentiate itself in high-value enterprise segments, enhancing revenue visibility and margin potential despite challenges in other hardware areas.

However, the company still faces margin pressure, notably in legacy hardware segments where commoditisation and cyclical PC sales dampen profitability. While Dell forecasts strong long-term growth, with revenue expected to reach $122 billion and earnings to hit $7.4 billion by 2028, this requires sustained growth of around 6.4% annually and a significant increase in earnings from current levels. The PC segment is expected to grow modestly at around 1% per year, mainly driven by commercial systems rather than consumer demand.

Analysts caution that rising costs for memory and components, as well as competitive pressures and geopolitical factors, could strain margins. For instance, securing high-end Nvidia GPUs remains challenging due to supply constraints focused on hyperscalers. Despite these hurdles, Dell’s operational scale offers leverage, potentially enabling price adjustments to offset increased costs.

Investor sentiment varies widely, with Dell share price targets from community analysts ranging between $112 and $222 per share, reflecting differing views on its ability to balance AI-driven growth with margin management. Dell’s commitment to increasing its dividend by at least 10% annually through 2030 further signals confidence in its financial strength.

Overall, Dell Technologies presents a compelling investment narrative anchored in the accelerating AI infrastructure market. Its recent financial performance and strategic product innovations highlight a company adapting successfully to new technology demands, albeit with ongoing challenges in legacy businesses and cost pressures. Investors are advised to weigh these factors carefully and consider multiple perspectives before forming a conclusion on Dell’s future prospects.

📌 Reference Map:

^[1] (Simply Wall St) - Paragraphs 1, 4, 6, 7
^[2] (Reuters) - Paragraphs 2, 3, 5, 6
^[3] (Dell Press Release) - Paragraph 1
^[4] (Reuters) - Paragraphs 2, 5
^[5] (Tom’s Hardware) - Paragraphs 4, 7
^[6] (IT Pro) - Paragraph 3
^[7] (AP News) - Paragraph 1

Source: Noah Wire Services

More on this

https://simplywall.st/stocks/us/tech/nyse-dell/dell-technologies/news/why-dell-technologies-dell-is-up-88-after-raising-outlook-on - Please view link - unable to able to access data
https://www.reuters.com/business/dell-forecasts-upbeat-growth-targets-strength-ai-server-sales-2025-11-25/ - Dell Technologies has issued a strong growth forecast for the fourth quarter of fiscal 2026, driven by surging demand for artificial intelligence (AI) servers. The company now anticipates $25 billion in AI server revenue for fiscal 2026, up from its earlier estimate of $20 billion. Its AI server backlog reached $18.4 billion at the end of the third quarter, propelled by $12.3 billion in new orders. Dell shipped $5.6 billion worth of servers during the quarter and has secured major deals with entities such as the U.S. Department of Energy, Abu Dhabi-based G42, Elon Musk’s AI startup xAI, and CoreWeave. Despite challenges from competitors and rising memory chip costs, Dell's operational scale allows for potential price increases. The company forecasts fourth-quarter revenue of $31–32 billion, exceeding analyst estimates, and has raised its full-year revenue and profit expectations. Third-quarter revenue slightly missed estimates at $27.01 billion, but profit of $2.59 per share beat expectations. Dell also appointed David Kennedy as its permanent chief financial officer.
https://www.dell.com/en-us/dt/corporate/newsroom/announcements/detailpage.press-releases~usa~2025~11~dell-technologies-delivers-third-quarter-fiscal-2026-financial-results.htm - Dell Technologies reported its third-quarter fiscal 2026 financial results, highlighting a net revenue of $27.005 billion, an 11% increase from the previous year. Operating income rose by 23% to $2.119 billion, and net income increased by 32% to $1.548 billion. The company also announced a 20% increase in its annual cash dividend to $1.78 per common share, reflecting confidence in its financial performance and commitment to returning value to shareholders.
https://www.reuters.com/business/dell-raises-full-year-profit-forecast-strong-ai-server-demand-shares-rise-2025-05-29/ - Dell Technologies has raised its annual profit forecast due to strong demand for its AI-powered servers, which are equipped with Nvidia's advanced chips. This surge is driven by high-profile clients like xAI and CoreWeave, contributing to a record $12.1 billion in AI server orders during the quarter and a $14.4 billion backlog. The U.S. Department of Energy also plans to deploy a Dell-Nvidia supercomputer named Doudna for complex computing tasks. Dell now projects an annual adjusted profit of $9.40 per share, up from $9.30. It also expects second-quarter revenue between $28.5 billion and $29.5 billion, exceeding analyst expectations. Despite strong sales, analysts caution about potential margin pressures from tariffs, pricing, and geographic factors.
https://www.tomshardware.com/tech-industry/dell-doubles-long-term-growth-expectations-due-to-surging-ai-demands - Dell Technologies has significantly raised its long-term growth projections, citing increased demand for AI infrastructure. During an analyst meeting on October 7, the company announced a new annual revenue growth target of 7-9%, up from its previous 3-4% estimate, and projected adjusted earnings per share to grow by at least 15% annually through fiscal 2030. This surge is fueled by booming sales of AI servers, which are expected to hit a $20 billion run-rate by 2026. Key clients include large cloud providers and AI-focused firms like CoreWeave and xAI. Dell’s Infrastructure Solutions Group, responsible for servers, storage, and networking, is projected to grow 11-14% annually, reflecting the firm's expanding role in AI hardware. However, challenges remain—particularly in securing high-end Nvidia GPUs, which are tightly controlled by hyperscalers. While the company isn’t abandoning its PC business, it anticipates only modest 1% annual growth in that segment, driven more by commercial systems than consumer products. Despite growth optimism, analysts caution about potential margin risks due to rising component costs. Dell reaffirmed its quarterly and yearly guidance and pledged to increase its dividend by at least 10% annually through 2030.
https://www.itpro.com/technology/artificial-intelligence/dell-technologies-doubles-down-on-ai-with-sc25-announcements - At the SC25 supercomputing conference in St. Louis, Missouri, Dell Technologies unveiled a series of AI-focused innovations to strengthen its commitment to artificial intelligence. Key announcements include the general availability of the PowerEdge XE9785 and XE9785L servers powered by AMD Instinct, and the debut of the Intel-powered PowerEdge R770AP server, all optimized for AI and HPC workloads. Dell also introduced two high-capacity switches—the PowerSwitch Z9964F-ON and Z9964FL-ON—capable of 102.4 Tb/s switching, ideal for intensive AI networking needs. Additionally, Dell expanded its AI Factory offering, which relies heavily on Nvidia hardware. New integrations include ObjectScale and PowerScale storage with Nvidia’s NIXL library, part of the distributed AI framework, Nvidia Dynamo. The AI Factory now also features servers equipped with Nvidia’s RTX Pro 6000 Blackwell Server Edition and Hopper GPUs. To enhance automation, Dell introduced the Dell Automation Platform within its AI Factory framework, promising optimized, secure, and automated AI solutions. All new products and updates are available immediately.
https://apnews.com/article/b7e78886c8b0aa41b6d9b9f9518c0e36 - Dell Technologies Inc., based in Round Rock, Texas, reported a fiscal second-quarter net income of $462 million, equating to 63 cents per share. When adjusted for one-time costs and stock option expenses, earnings rose to $1.74 per share, surpassing analysts’ expectations of $1.13 per share according to Zacks Investment Research. The company also exceeded revenue forecasts, posting $22.93 billion for the quarter, ahead of the $20.78 billion estimated by analysts. These results reflect stronger-than-anticipated performance in the quarter across its operations in the technology and computer services sector.

Noah Fact Check Pro

The draft above was created using the information available at the time the story first emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed below. The results are intended to help you assess the credibility of the piece and highlight any areas that may warrant further investigation.

Freshness check

Score: 8

Notes: The narrative presents recent financial results from Dell Technologies, including a record $27.01 billion revenue and a 32% increase in net income. The earliest known publication date of similar content is November 25, 2025, with a Reuters article titled 'Dell bets on rising AI server demand to forecast higher growth' . The report is based on Dell's official press release from November 25, 2025 , which typically warrants a high freshness score. However, the Simply Wall St article from November 28, 2025 republishes content from the Reuters article, indicating recycled material. The narrative includes updated data but recycles older material, which may justify a higher freshness score but should still be flagged.

Quotes check

Score: 7

Notes: The narrative includes direct quotes from Dell's Chief Operating Officer Jeff Clarke, such as 'We're in a very unique time. It's unprecedented. We have not seen costs move at the rate we've seen.' These quotes are also present in the Reuters article from November 25, 2025 , indicating potential reuse. The wording matches exactly, suggesting the quotes are not original to the narrative.

Source reliability

Score: 9

Notes: The narrative originates from Dell Technologies' official press release, a reputable organisation. The Reuters article is also from a reputable organisation. However, the Simply Wall St article is from an obscure, unverifiable, or single-outlet narrative, which introduces some uncertainty.

Plausability check

Score: 8

Notes: The narrative's claims about Dell's financial performance and AI server demand are plausible and align with recent industry trends. The Reuters article from November 25, 2025 corroborates these claims. The narrative lacks specific factual anchors, such as names, institutions, and dates, which reduces the score and flags it as potentially synthetic.

Overall assessment

Verdict (FAIL, OPEN, PASS): FAIL

Confidence (LOW, MEDIUM, HIGH): MEDIUM

Summary: The narrative relies heavily on recycled content from Dell's official press release and the Reuters article from November 25, 2025 , with direct quotes matching exactly. The Simply Wall St article republishes content from the Reuters article, indicating recycled material. The lack of original content and specific factual anchors raises concerns about the narrative's originality and authenticity.

Dell Technologies
AI servers
technology investment