Dell AI Server Momentum Accelerates With Record $60.9B In Q2 AI Orders; Backlog Hits $95B

‘Our AI server momentum continues to accelerate,’ says Dell Chief Operating Officer Jeff Clarke. ‘We booked $60.9 billion in AI orders this quarter, the most in our history.’

Dell Technologies Tuesday took its AI market momentum to new heights, reporting a record $60.9 billion in AI orders in its second fiscal quarter ended July 31 along with a record AI backlog of $95 billion.

“Our AI server momentum continues to accelerate,” said Dell Chief Operating Officer Jeff Clarke in a conference call with analysts after the company reported record AI-optimized server sales of $16.4 billion, up 100 percent from $8.2 billion in the year-ago quarter. “We booked $60.9 billion in AI orders this quarter, the most in our history.”

Clarke said Dell’s AI sales pipeline “continued to grow sequentially and remains multiples” of the $95 billion backlog even after booking $131.7 billion into orders over the last 12 months.

“With accelerating demand and a growing pipeline of differentiated capabilities we are well positioned to capture the opportunity ahead,” said Clarke.

Dell raised its AI-optimized server revenue guidance for the fiscal year to $74 billion, up from $60 billion.

What’s more, with AI momentum accelerating and what it called the “opportunity expanding” across the Dell portfolio, the company raised its full year fiscal 2027 revenue guidance by $25 billion to $192 billion, up nearly 70 percent year over year.

Finally, Dell raised its non-GAAP 2027 fiscal year earnings per share to $25, up from $17.90.

Dell shares were up $29.20 or 7 percent in after-hours trading to $453.99.

Overall, Dell reported second-quarter sales and earnings above expectations with record revenue of $47 billion, up 58 percent from $29.77 billion year over year. The Zacks consensus estimate was $45.34 billion.

Dell reported non-GAAP diluted earnings per share of $7.04, up 203 percent from $2.32 in the year-ago quarter and well above the Zacks consensus estimate of $4.95 per share.

AI demand is “broadening across neoclouds, sovereign and enterprise customers” with Dell’s AI customer count now surpassing 6,500, said Clarke. “The scale and complexity of these deployments reinforce why customers choose us,” he said.

Clarke said the AI market “complexity” plays to Dell’s “strength” with the company’s “engineering capabilities, broad portfolio, global supply chain and ability to deploy and support infrastructure at scale globally” as critical differentiators versus competitors. That is enabling customers to move from AI design to production “more quickly,” he said.

C.R. Howdyshell, CEO of Independence, Ohio-based Dell Titanium partner Advizex, a Myriad360 company, said the record performance bodes well for Dell’s future and the partners that are teaming with the AI infrastructure powerhouse.

“Our AI sales pipeline with Dell continues to grow,” he said. “We are seeing significantly more adoption in the enterprise segment with a high level of interest across all industries. We’re very optimistic and excited about Dell’s channel commitment.”

Howdyshell credited Dell Senior Vice President North America Channel Sales Gregg Ambulos for leading the AI partner momentum charge. “Gregg’s done a great job working with the highest-level partners to capture the AI opportunity,” he said. “We’re working closely with Gregg and his team to scale our AI business.”

Clarke said Dell is also seeing record revenue growth in its traditional server and networking business with revenue of $10.5 billion, up 122 percent from $4.73 billion in the year-ago quarter.

A growing number of enterprise customers are adding CPU capacity to support AI and agentic workloads, said Clarke. “These workloads are creating incremental demand for traditional servers,” he said.

Clarke said over the last two quarters Dell has gained more than 10 points of traditional server share. “We expect to gain share again this quarter,” he said.

In the past two quarters, Dell has generated almost as much revenue from traditional servers and networking in any prior full year in Dell’s history, said Clarke.

“With the majority of our installed base still on (Dell) 14th generation (compared with the current 17G Dell server) or older servers we see a significant and durable refresh opportunity ahead,” said Clarke. “The strength and depth of demand and the volume of our continued share gains demonstrate the competitiveness of our portfolio and the consistency of our execution.”

Dell also posted record quarterly storage sales of $4.9 billion, up 26 percent from $3.85 billion in the year-ago quarter with strong growth in Dell’s own storage intellectual property offerings including PowerStore, PowerProtect and Dell PowerFlex software-defined storage.

“We are beginning to see incremental demand from AI workloads, which require customers prepare, manage and move increasingly large volumes of data,” said Clarke.

In its Client Solutions Group (CSG) device business, Dell sales were up 20 percent year over year to $15 billion compared with $12.5 billion in the year-ago quarter. Commercial sales were up 22 percent to $13.19 billion compared with $10.7 billion in the year ago quarter. “CSG revenue is growing at the fastest rate in five years,” he said.

Clarke said overall demand for Dell solutions is “exceeding available supply” with customers entering a new era of infrastructure modernization. “Customers are modernizing their data centers for both AI and non-AI workloads and the benefits are meaningful. AI is an important catalyst but the opportunity extends well beyond AI optimized infrastructure.”

Clarke said customers no longer see IT environments as “cost centers but as value drivers that enable growth, productivity and competitive advantage.”

In fact, Clarke said customers are “expanding and reallocating budgets” to support continued IT investments. “This is creating opportunities across our portfolio from infrastructure to client devices,” he said. “Our world-class supply chain and ability to serve customers across their IT environments are helping us meet more of their needs and gain share.”