TLDR
- Dell reported July-quarter revenue of $46.97 billion, up 58% year-over-year, beating estimates of $44.89 billion
- Adjusted EPS of $7.04 crushed the $4.91 consensus estimate
- AI server orders hit $61 billion, pushing the total AI backlog to approximately $95 billion
- Dell raised FY27 revenue guidance to approximately $192 billion and non-GAAP EPS guidance to $25.50
- Multiple analysts raised price targets, including JPMorgan to $635 and Mizuho to $600, with a consensus “Moderate Buy” rating
Dell Technologies (DELL) stock jumped roughly 7% intraday after the company posted one of its strongest quarters on record. The stock traded as high as $534.99 before settling around $525.66, on volume roughly 30% above its daily average.
Revenue for the July quarter came in at $46.97 billion, up 57.7% year-over-year, well ahead of the $44.89 billion Wall Street had expected. Adjusted EPS of $7.04 beat the consensus of $4.91 by more than two dollars.
Growth was broad across the business. Traditional Server and Networking surged 122%, AI servers grew 100%, Storage rose 26%, and the PC segment (CSG) gained 20%.
AI Backlog Takes Center Stage
AI server revenue reached $16.4 billion for the quarter. New AI server orders hit $61 billion, pushing Dell’s total AI backlog to around $95 billion. That number is getting a lot of attention on Wall Street, though some analysts are more focused on the margins tied to converting those orders than the backlog figure itself.
Infrastructure Solutions Group (ISG) margins reached 15%, up 630 basis points year-over-year. Storage growth was a contributor to that margin expansion.
Evercore ISI removed Dell from its Tactical Outperform list following the beat, citing the outsized move as the reason, but kept the stock as a Top Pick with an Outperform rating and a $575 price target. The firm noted Dell remains supply constrained, which it sees as supportive of continued growth.
Guidance Gets a Big Lift
Dell raised its FY27 revenue guidance to approximately $192 billion, implying around 70% year-over-year growth. The company now expects non-GAAP EPS of approximately $25.50, up sharply from its prior estimate of $17.90.
Q3 FY27 EPS guidance was set at $6.50.
Several analysts moved their targets higher in response. JPMorgan raised its target to $635. Mizuho lifted its target to $600 with an Outperform rating. Raymond James went to $617. Goldman Sachs also raised its target, citing AI server demand and margin expansion. Morgan Stanley and TD Cowen remained constructive.
Deutsche Bank initiated coverage with a Hold rating and a $480 target, the lone cautious voice among the major banks.
The consensus rating across 36 analysts stands at “Moderate Buy,” with an average price target of $553.79. One analyst has a Strong Buy, 26 have Buy ratings, and nine are at Hold.
On the insider front, director-level entities sold over $58 million worth of stock in July at prices around $453. Institutional investors hold 76.37% of the stock.
Dell also declared a quarterly dividend of $0.63 per share, payable October 30, with a record date of October 20.
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