What Happened?
Shares of computer hardware and IT solutions company Dell (NYSE: DELL) jumped 30.2% in the afternoon session after it reported a blowout Q1 FY2027 earnings report.
Notably, the stock had already risen approximately 150% year-to-date before the print. The outperformance was driven by the AI server business which generated $24.4 billion in new orders in a single quarter, more than double the $16.1 billion it actually shipped, leaving the company with a record $51.3 billion AI backlog.
In addition, Dell posted revenue of $43.8 billion, up 88% year-over-year, crushing the Wall Street consensus of $35.4 billion by over $8 billion. Non-GAAP EPS of $4.86 came in 66% above the $2.93 estimate. The Infrastructure Solutions Group alone generated $29 billion in revenue, up 181%, with AI-optimised server revenue of $16.1 billion representing a 757% increase year-over-year.
Management then raised the stakes on guidance: full-year FY2027 revenue was lifted to a midpoint of $167 billion, up from prior guidance of $140 billion, and the full-year AI server revenue target was reset to $60 billion, up 144% from the prior year. Q2 revenue guidance of $44 to $45 billion also significantly exceeded the prior Street estimate. COO Jeff Clarke said it plainly: "The AI opportunity shows no signs of slowing.".
The shares closed the day at $421.03, up 31.8% from the previous close.
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What Is The Market Telling Us
Dell’s shares are very volatile and have had 22 moves greater than 5% over the last year. But moves this big are rare even for Dell and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 3 days ago when the stock gained 3.7% on the news that Micron Technology surged 17% on a UBS price target hike that signaled AI hardware demand is structurally undersupplied.
Stocks like Micron Technology (MU) and Advanced Micro Devices (AMD) were at the forefront, with Micron posting an impressive gain of 17.16% and AMD up by 5.68%. Hardware companies (Dell, HPE, Arista, Vertiv, Super Micro) are the picks-and-shovels of the AI buildout: when memory and GPU demand accelerates, server, networking, and cooling orders follow.
Dell is up 229% since the beginning of the year, and at $420.23 per share, it has set a new 52-week high. Investors who bought $1,000 worth of Dell’s shares 5 years ago would now be looking at an investment worth $4,086.
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