Dell COO Jeff Clarke: Supply Chain Edge Poised To Drive Share Gains In Spite Of Soaring Memory Costs

“Our long-term relationships, supply agreements with our partners we believe position us to take share in all of our businesses and in particular PCs,” says Dell COO Jeff Clarke.

Dell Technologies Vice Chairman and Chief Operating Officer Jeff Clarke Thursday told analysts that the $113.5 billion company’s supply chain prowess is poised to drive share gains in PCs, servers and storage in spite of astronomical memory prices increases.

“If you look at the last industry-wide shortage (during the COVID-19 pandemic) Dell excelled and took share across the board, most notably in its PC business,” said Clarke after Dell posted record revenue of $33.4 billion in its fourth fiscal quarter ended January 30, up 39 percent year over year. “Our long-term relationships, supply agreements with our partners we believe position us to take share in all of our businesses and in particular PCs.”

To that point, despite the memory price increases rocking the industry, Dell posted revenue growth of 14 percent in its PC business in the fourth fiscal quarter. “We grew customers and we are going to continue to focus on driving and winning in that (PC) business,” said Clarke. “We think there is a structural share opportunity for us certainly over the next couple of years as our supply chain team has positioned us quite well. I believe we can do that in servers. I believe we can do that in storage as well.”

Clarke’s comments came after Dell posted better than expected results for the fourth fiscal quarter with non-GAAP diluted earnings of $3.89 per share, up 45 percent. That is up 35 cents per share from the Zacks consensus estimate of $3.54 per share. Dell also handily beat the Zacks consensus estimate of $31.91 billion with fourth-quarter sales of $33.4 billion.

Dell’s gross margin rate in the quarter was slightly better than anticipated at 20.5 percent even with the soaring memory prices.

In response to the strong results, Dell shares soared 10 percent or $12.16 in after-hours trading to $133.60.

Dell delivered what Clarke called a “monumental year” with record full year fiscal year 2026 non-GAAP diluted earnings per share of $10.30, up 27 percent, on record sales of $113.5 billion, up 19 percent.

Dell closed $64.1 billion in AI orders in the fiscal year, shipping $25.2 billion and exited the year with a record $43 billion in AI systems backlog. “The AI opportunity is meaningfully growing and transforming the company,” said Clarke.

Dell is gaining share in PCs and is strengthening its ISG business “strong margins” in traditional servers and storage, said Clarke.

Clarke said the strong results came with the “supply environment as tight as we have ever seen” and input costs for Dell products moving higher.

“Our priorities were straightforward,” Clarke said. “First secure supply, next price to protect our margin rates. You have seen this in ISG (Infrastructure Solutions Group comprised of enterprise servers and storage). CSG will follow with improvements beginning in Q1 and continuing through the year.”

Clarke went into detail on the soaring memory prices with the spot market for a gigabit of DRAM over the last six months up nearly five-and-a-half times. In the NAND market, the cost is up nearly four times over the last six months, said Clarke.

Industry analysts expect second calendar quarter memory prices to be up 20 to 50 percent, said Clarke, with another five to 15 percent increase in the third quarter and finally a five to ten percent increase in the fourth quarter.

“Those are probably ballparks where things are,” said Clarke. “So we haven’t changed anything. We continue to work with our long-term partners. We’ve had LTAs (long-term agreements) in place. We’ve had capacity agreements in place. We know how to budgetary price.” He said the Dell financial team has a “best estimate” of memory costs for the year.

Clarke said Dell is working its memory partners to be “flexible and agile” as possible. “We’re working through things of, how do we minimize our complexity?” he said. “How do we improve our mix? How do we sell what’s coming? How do we improve our designs to take whatever parts that are available?”

Clarke said Dell became very proficient during the COVID-19 pandemic at taking pricing actions and implementing supply chain actions to protect margins.

“All of the best practices that we learned during COVID, as I mentioned in the last call, we put in place, and we put them in place faster,” he said. “We changed the entire pricing of our server business on December 10th, in a couple of days. We had tens of thousands of open quotes in the PC business, and changed them all on January the 6th.”

The lessons learned during the COVID-19 pandemic have paid off as Dell moved quickly to ensure that it would not be hit hard by the soaring memory prices, said Clarke.

“We moved that quickly,” he said. “That’s what we learned in COVID. That’s what we put in place here. So we made list price changes across the board. We changed, in our vernacular, our internal mechanisms around Smart Price and margin floors all changed instantaneously. We’re moving to discount off list price. We’re compressing discounting. Our quotes are valid for the shortest period of time they’ve ever been. and we’re reducing promotions and all sorts of special pricing going forward. That’s what we’ve done. It’s been in place.”

In the traditional server market, Clarke said, demand “significantly outpaced supply” in the quarter with “strong double-digit demand”growth across every region. “We saw broad-based strength with units up, a larger active buyer base and a richer mix of our 16th and 17th generation platforms,” he said.

In the PC business, Clarke said Dell delayed implementing pricing action in order to take market share. “We purposely delayed implementing that price move (in the PC business) to stay in the hunt, to take share and to drive growth, which will service us for the long run,” he said. “And then when we made the change on January the 6th, it wasn’t 90 days later, it was that day we stabilized margins.”

C.R. Howdyshell, the CEO of Advizex, a Dell Titanium partner that just was acquired by Myriad360, said Dell’s supply chain prowess is resonating with customers particularly in the AI market.

In fact, he said he was just on a customer sales call with Dell Senior Vice President of North America Kyle Leciejewski in which the customer was clearly impressed by Dell’s supply chain prowess.

“The CEO of the customer definitely gravitated to the supply chain benefits of working with Dell,” said Howdyshell. “The customer bought in because they are looking for a long-term partnership with long-term growth. They need to be able to make commitments to their customers that they can stand by and they believe Dell will be there for them.”

Howdyshell said Advizex is also seeing strong traction with Dell in the compute market. “We just won a $7.7 million deal with Dell compute in a very competitive environment,” he said. “Dell’s supply chain prowess was key to winning that deal.”

For the current fiscal year, Dell is projecting 23 percent revenue growth at the midpoint and 25 percent earning per share growth driven by the booming AI business and improving profitability across the rest of the portfolio, said Clarke. “We are positioned for another record year,” he said.

Joseph F. Kovar contributed to this story.