Dell Stock Exploded Over 300%

Primary Journalistic Dispatch & Direct Reporting

Dell (DELL) is among the top-performing S&P 500 ($SPX) stocks over the past year, with its shares rising 310%. The massive rally reflects AI-related tailwinds and rising enterprise IT spending, both of which are supporting stronger demand for Dell's products and translating into robust revenue and earnings growth.

Despite the stock's dramatic ascent, Dell has further room to run. Management's latest forecast calls for adjusted earnings per share (EPS) to rise by 150% in fiscal 2027. With exceptionally strong demand, Dell could surpass its internal guidance, suggesting the stock has additional upside despite its enormous run-up.

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In-Depth Developments & Factual Context

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Dell entered the second half of fiscal 2027 with strong momentum after posting record results during the first six months of the year. Strong demand across its infrastructure and client businesses has prompted management to significantly raise its full-year expectations.

Dell's latest quarterly results reflect growing demand and improving operating leverage. Its top line increased 58% to $47 billion in Q2, while adjusted gross margin expanded by 240 basis points to 21.1%. Adjusted EPS jumped 203% to $7.04.

Industry Impact & Strategic Analysis

The Infrastructure Solutions Group (ISG) continued to grow at a solid pace. Revenue in the segment climbed 89% to a record $31.8 billion, producing $4.8 billion in operating income. During the second quarter, Dell booked a record $60.9 billion in AI-related orders and recognized $16.4 billion in AI server revenue.

It ended the quarter with an AI backlog of approximately $95 billion. Its pipeline continued to expand sequentially and remains several times larger than its existing backlog. Notably, over the past 12 months, Dell has converted $131.7 billion of demand into orders.

The customer base is also becoming increasingly diversified. Demand is coming from neocloud providers, sovereign customers, and large enterprises, while the number of customers using Dell's AI infrastructure has surpassed 6,500.

Forward Outlook & Market Perspective

Traditional server demand has also accelerated sharply, with revenue in the category increasing 122%. A significant portion of this growth is coming from existing customers upgrading and modernizing their data centers. Businesses are increasingly investing in infrastructure to support conventional workloads while also addressing higher security, resiliency, and performance requirements.

At the same time, AI and agentic workloads are creating additional demand for conventional CPU-based computing.

Dell's storage business returned to growth and gained market share. Storage revenue increased 26%, supported by strong demand. Moreover, profitability improved. The business is seeing incremental demand from AI workloads, which is likely to accelerate storage revenue growth.

After a solid first-half performance, Dell's management revised its full-year outlook upward, which should support the rally in its share price.

Management expects third-quarter revenue of $49 billion, up 80% year-over-year (YoY). ISG is expected to grow roughly 145%, with AI server revenue projected at approximately $19 billion.

For the full fiscal year, Dell raised its revenue forecast by $25 billion to $192 billion at the midpoint, implying growth of approximately 70%. The company now expects adjusted EPS of $25.50, compared with its previous forecast of $17.90. That represents expected YoY EPS growth of 150%.

Reporting synthesized and verified under Nexvoro.tech editorial guidelines. Full primary records referenced via Yahoo Finance.