Dell Stock Jumps to $120 on Q1 Revenue Beat Amid Record AI Demand, Falls Back on EPS Miss

Quick overview

Dell Technologies’ shares rose about 5% in after-hours trading, but they have already recouped most of their gains following a strong Q1 sales report driven by rising demand for servers with AI optimization.

After-Hours Rally Follows Calm Day

Dell Technologies (DELL) saw its stock price leap more than 5% in after-hours trading on Thursday, closing at $119.50 after a muted regular session where it settled at $113.57. The post-market surge came directly after the company released its first-quarter earnings report, which showcased strong revenue growth and rising AI infrastructure demand—helping reignite investor enthusiasm.

Q1 Report: AI Drives a Strong Quarter

Despite falling short on EPS expectations, Dell’s Q1 report exceeded revenue forecasts and reflected record-breaking infrastructure sales, largely attributed to unprecedented demand for AI-optimized servers. The company emphasized that it generated over $12 billion in AI-related orders for the quarter—already surpassing all such orders in FY25—with a remaining backlog of $14.4 billion.

The solid top-line performance reflects a strategic pivot toward AI-centric infrastructure, a space where Dell is seeing accelerating momentum.

Q1 Highlights: Revenue and Earnings Performance

• Q1 revenue: $23.38 billion, exceeding the consensus estimate of $23.14 billion (source: Benzinga Pro).
• Adjusted EPS: $1.55 per share, falling short of analyst expectations of $1.69 per share.
• Year-over-year growth: Total revenue increased by 5%.

Segment Performance

Infrastructure Solutions Group (ISG):

• Revenue reached $10.3 billion, a 12% increase YoY.
• Strong growth fueled by demand in servers and networking.

Client Solutions Group (CSG):

• Revenue totaled $12.5 billion, representing 5% YoY growth.

AI-Driven Momentum

Record-breaking servers & networking revenue:

• Achieved a Q1 record of $6.3 billion in this segment.
• Experiencing “unprecedented demand” for AI-optimized servers, according to COO Jeff Clarke.

AI order surge:

• Booked $12.1 billion in AI-related orders in Q1 alone.
• AI backlog now stands at $14.4 billion, exceeding all of FY25’s shipments.

Cash Position & Shareholder Returns

• Operating cash flow: $2.8 billion during the quarter.
• Capital returned to shareholders: $2.4 billion via buybacks and dividends.
• Ending cash balance: $7.7 billion in cash and equivalents.

Outlook & Guidance

• Q2 revenue guidance: Between $28.5 billion and $29.5 billion.
• Q2 adjusted EPS forecast: $2.25 per share.

Full-year fiscal 2026 outlook:

• Revenue projected between $101 billion and $105 billion.
• Adjusted EPS forecasted at $9.40 per share.

Dell Stock Chart Weekly – Will Open Above the 50 SMA Tomorrow

Dell’s recent stock action reflects a turnaround from a tough year. After reaching a high near $180 in May 2024, the stock slumped significantly, bottoming out around $67 by early April 2025, coinciding with broader market volatility.

However, technical indicators pointed to a potential rebound. The weekly chart displayed a clear support level at the 200-day Simple Moving Average (SMA), triggering a wave of buying interest. This momentum has now propelled Dell back toward the $120 level, aided by Thursday’s bullish after-hours gap.

Looking Ahead: Building on AI Strength

Dell’s strong cash flow, substantial shareholder returns, and rapidly growing AI order book signal confidence in its long-term growth strategy. With guidance pointing to revenue of up to $105 billion for fiscal 2026 and a renewed focus on AI infrastructure, the company is well-positioned to sustain its recovery.

Conclusion: Dell Technologies delivered solid revenue growth and record-breaking infrastructure sales in Q1, driven by explosive demand for AI-optimized servers. Despite missing earnings estimates, the company’s robust order pipeline—particularly in AI—positions it for continued momentum. With a strong cash position and increased shareholder returns, Dell is doubling down on its AI-led infrastructure strategy, setting high expectations for the remainder of fiscal 2026.

ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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