Dell Technologies Q2 2027 earnings: AI server boom drives big beat and raised outlook
Dell's Q2 2027 profit and sales sharply beat estimates as AI server orders and backlog hit records, prompting a big raise to full-year guidance.
| Q2 2027 | Reported | Expected | Surprise |
|---|---|---|---|
| EPS | $7.04 | $5.01 | +40.5% |
| Revenue | $46.97B | $45.85B | +2.4% |
Key takeaways
- Earnings and revenue both topped Wall Street forecasts by a wide margin, driven by surging demand for the AI servers Dell builds for data centers.
- Dell’s Infrastructure Solutions Group, which includes AI and traditional servers and storage, brought in $31.8 billion, up 89% from a year earlier — the tenth straight quarter of strong growth for that unit.
- The AI server business alone generated $16.4 billion in revenue (roughly double a year ago) and booked a record $60.9 billion in new orders, leaving Dell with a $95 billion backlog of AI server orders still to be filled.
- The PC and device business (Client Solutions Group) grew a more modest 20% to $15.0 billion, with commercial (business) PC sales posting their strongest growth in over four years even as management flagged some softening expected in the broader consumer PC market.
- TTM operating margin near 8% and net margin around 6% show Dell still runs on thin profit margins typical of a hardware seller, but growth in revenue and profit far outpaced margin expansion this quarter as the AI server ramp added scale rather than pricing power.
- Dell raised its full fiscal-year 2027 outlook, now expecting about $192 billion in total revenue (up $25 billion from its prior forecast) including $74 billion from AI server sales, and lifted full-year adjusted earnings guidance to $25.50 per share from $17.90.
- For the current (fiscal third) quarter, Dell guided to about $49 billion in revenue and $6.50 in adjusted earnings per share, implying growth continues at a rapid pace.
- Executives said corporate customers increasingly view technology spending as a growth investment rather than just a cost, pointing to the AI server order backlog as the clearest evidence of that shift.
- Shares rose roughly 9% in after-hours trading following the report, as both the quarter’s results and the raised full-year forecast exceeded analyst expectations.
Q2 2027 in context
| Metric | Jul 2026 | Aug 2025 | Change |
|---|---|---|---|
| Revenue | $47.0B | $29.8B | +57.7% |
| Net income | $4.1B | $1.2B | +255.1% |
| Free cash flow | $986M | $1.9B | -47.2% |
| Diluted EPS | $6.34 | $1.70 | +272.9% |
| Gross margin | 20.9% | 18.3% | +2.6 pts |
| Operating margin | 11.5% | 6.0% | +5.5 pts |
| Net margin | 8.8% | 3.9% | +4.9 pts |
Figures for the quarter ended Jul 2026 and the quarter ended Aug 2025, as reported to the SEC.
How the stock took it
Dell Technologies Inc closed at $456.01 on Aug 31, 2026, the last session before the report, and at $492.20 on Sep 2, 2026, the first session after it — +7.9% across the report.
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Fundamentals
| Metric | Value | Period |
|---|---|---|
| Gross margin | 19.1% | Trailing 12 months |
| Operating margin | 7.9% | Trailing 12 months |
| Net profit margin | 6.3% | Trailing 12 months |
| Pretax margin | 7.6% | Trailing 12 months |
| EPS | $12.59 | Trailing 12 months |
| Revenue growth (YoY) | 38.6% | Trailing 12 months |
| EPS growth (YoY) | 92.1% | Trailing 12 months |
| Return on equity | 130.7% | Trailing 12 months |
Sources: company report · earnings call · CNBC