Dell Technologies (DELL) will release its second-quarter fiscal 2027 financial results on Sept. 1. Following the strong momentum seen in Q1, analysts expect Dell’s earnings to more than double, driven largely by continued demand for AI infrastructure and disciplined pricing.
DELL stock has already surged 272% year-to-date (YTD), reflecting strong AI server revenue and growing earnings. Looking ahead, rising demand for servers and infrastructure designed to support AI workloads is creating a significant growth opportunity for Dell. At the same time, pricing discipline could help the company translate higher revenue into stronger profitability.
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Despite the stock's sharp appreciation, its valuation does not appear excessively stretched when considered against expected earnings growth. With Dell expected to deliver another strong quarter, its earnings growth trajectory could provide further support for the shares.
www.barchart.com Dell’s Q2 Outlook: Revenue to Soar, Earnings to More Than Double
Dell is positioned for another strong quarter as enterprise spending on AI infrastructure, data center modernization, high-performance computing, storage, and PC refresh cycles continues to support growth. The company’s expanding AI server backlog provides significant revenue visibility for the quarters ahead.
For Q2, Dell is guiding for revenue of $44 billion to $45 billion, implying approximately 50% year-over-year (YoY) growth at the midpoint of $44.5 billion. The Infrastructure Solutions Group (ISG) is expected to remain the primary growth driver, with AI server demand continuing to benefit from broad-based adoption across enterprises and other customer segments. In addition, strength in traditional servers and growth in storage will support the top line.
Dell’s recent AI infrastructure performance highlights strong underlying demand. In Q1, the company booked $24.4 billion of AI orders and recognized $16.1 billion in AI server revenue. It ended the quarter with a record $51.3 billion AI backlog, while its pipeline remained several times larger than the backlog.
The imbalance between demand and supply remains important for Dell’s near-term outlook. With customer demand still exceeding available supply, the company’s backlog is likely to increase further. Its customer base also surpassed 5,000, with growth spanning neocloud providers, sovereign customers, and enterprises. Broadening customer diversification reduces reliance on any single segment and supports the durability of the AI infrastructure cycle.
For Q2, Dell expects approximately $15.5 billion in AI server revenue, helping drive roughly 75% growth in ISG revenue.
Traditional server demand is expected to remain strong as large enterprises refresh existing computing environments and expand capacity to accommodate increasingly demanding workloads. AI inference is becoming an incremental driver of traditional compute demand, creating a broader opportunity for Dell across both AI-optimized and conventional server platforms.
Storage is another important component of Dell’s ISG performance, particularly because the business contributes to segment profitability.
Dell expects Q2 earnings of approximately $4.80 per share, representing more than 100% YoY growth. Analysts expect EPS growth of more than 120%. Notably, Dell has exceeded Wall Street’s EPS expectations in each of the past four quarters, including a 66% beat last quarter.
Analysts See Upside in DELL Stock
Dell is expected to deliver strong revenue and earnings in Q2, and the momentum will sustain through fiscal 2027 and beyond. However, the stock’s valuation still looks reasonable, supporting further upside.
DELL stock trades at 24x forward earnings, a valuation that looks reasonable relative to its expected earnings growth. Analysts forecast 96.3% growth in fiscal 2027 EPS, while earnings are expected to continue growing at a double-digit rate in fiscal 2028 despite increasingly difficult year-over-year comparisons.
Despite the significant share price rally, Wall Street maintains a “Moderate Buy” consensus rating on DELL. The consensus price target of $509.86 implies approximately 10% upside from current levels, while the highest analyst target of $700 represents potential upside of about 51%.
Dell is benefiting from solid AI demand. Moreover, rapid earnings growth and a still-reasonable valuation leave room for further stock appreciation.
www.barchart.com On the date of publication, Amit Singh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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