Dell delivered a strong quarter with revenue of $43.84 billion and non-GAAP EPS of $4.86, both exceeding estimates. AI-Optimized Server revenue rose 757% to $16.13 billion, and management recorded $24.40 billion in AI orders during the quarter. Full-year FY27 revenue guidance increased to $165 billion to $169 billion, with non-GAAP EPS guidance of $17.90 at the midpoint. The bull case centers on backlog growth, including a $43 billion AI server backlog at the end of FY26 and additional orders that support roughly $60 billion in AI server revenue in FY27. ISG operating margin expanded to 10.5%, while gross margin fell to 17.8% due to AI server mix dilution.
"Dell shares closed at $317.05 on May 28, up 25.42% in a week, 53.96% in a month, and 183% over one year. The catalyst is Q1 FY27: revenue of $43.84 billion beat estimates by 22.58%, non-GAAP EPS of $4.86 beat by 63.99%, and AI-Optimized Server revenue exploded 757% to $16.13 billion. Management booked $24.40 billion in AI orders during the quarter alone and raised full-year FY27 revenue guidance to $165 billion to $169 billion, with non-GAAP EPS guided to $17.90 at the midpoint."
"The bull case is a backlog story. Dell exited FY26 with a $43 billion AI server backlog and added $24.40 billion of fresh orders in a single quarter. Guidance for roughly $60 billion in AI server revenue in FY27 represents 144% growth, and ISG operating margin already expanded to 10.5%. Reddit sentiment hit 85 (Very Bullish) post-earnings. If forward EPS continues to migrate higher, our bull case scenario tops out at $414.49 over the next twelve months."
"An AI Server Quarter That Changed The Narrative Dell shares closed at $317.05 on May 28, up 25.42% in a week, 53.96% in a month, and 183% over one year."
Read at 24/7 Wall St.
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