Dell Technologies Raises Guidance Amid Strong Q2 Results
Dell Technologies has raised its annual outlook, thanks to impressive performance in the second quarter and a significant increase in demand for AI infrastructure. The company reported record revenues of $29.8 billion, marking a 19% increase compared to the previous year, and exceeding analysts’ expectations of $29.02 billion. Adjusted earnings per share (EPS) also rose by 19%, reaching $2.32, while the market had anticipated $2.29. Despite these positive figures, Dell’s shares dipped around 4% in after-hours trading.
“We achieved strong top-line results and profitability,” noted CFO Yvonne McGill. “Our cash generation remains robust and continues to provide value to shareholders,” she added.
AI Fuels Revenue Growth
The Infrastructure Solutions Group (ISG) stood out, propelled by the increased demand for AI servers. ISG revenues surged by 44% to $16.8 billion, with server and networking revenues climbing 69% to $12.9 billion. However, the storage segment saw a decline, with revenues dropping 3% to $3.9 billion.
In an interesting development, Dell shipped $10 billion in AI solutions during the first half of fiscal year 2026, already exceeding the entire total for fiscal year 2025. Consequently, the company has adjusted its full-year AI server shipping target to $20 billion.
On the Client Solutions Group (CSG) side, which encompasses PCs and commercial devices, revenues grew by 1% to $12.5 billion. Interestingly, revenue from commercial clients was up by 2%, while consumer client revenue declined by 7%.
Full-Year and Third-Quarter Guidance
Looking ahead, following a strong Q2, Dell anticipates revenues to be between $105 billion and $109 billion for fiscal year 2026, with a midpoint projection of $107 billion, reflecting a 12% growth rate. The adjusted EPS for the entire year is expected to be around $9.55.
For the third quarter, Dell predicts revenues in the range of $26.5 billion to $27.5 billion, with an adjusted EPS of $2.45 at the midpoint, indicating sustained momentum in both AI and enterprise infrastructure. Current analyst forecasts are slightly higher, expecting $26.31 billion in revenue and an adjusted EPS of $2.55.
Is Dell Stock a Good Buy Now?
On Wall Street, Dell stock holds a moderate buy consensus rating, supported by 11 buy recommendations and four holds over the past three months. The average target price for Dell shares is $144.79, suggesting a potential upside of around 8.01%. However, it’s important to consider that these estimates may shift following the recent revenue report.
