Dell’s Q4 Earnings Beat Expectations, Fueled by AI Infrastructure Demand

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Dell (DELL) announced fiscal fourth-quarter earnings that surpassed analysts’ expectations, as the PC and server manufacturer benefited from increased demand for artificial intelligence infrastructure.

Dell reported adjusted earnings of $1.91 billion, equivalent to a record $2.68 per share. This is an increase from $1.66 billion, or $2.27 per share, from the previous year and exceeded the analysts’ projections. While revenue of $23.9 billion was up 7% year-over-year, it slightly missed the analyst consensus from Visible Alpha.

The growth was largely driven by a 37% surge in servers and networking revenue, reaching $6.6 billion. This increase was fueled by demand for both AI and traditional servers.

Earlier this month, Bloomberg reported that Dell was close to finalizing a deal to sell over $5 billion worth of servers powered by Nvidia (NVDA) chips to Elon Musk’s artificial intelligence company, xAI. The two companies have previously partnered. Last summer, Musk and Dell executives stated that Dell would supply hardware for the AI “supercomputer” the company intended to construct in Memphis, Tennessee.

“Our prospects for AI are strong, as we extend AI from the largest cloud service providers, into the enterprise at-scale, and out to the edge with the PC,” said Chief Operating Officer Jeff Clarke in a statement released on Thursday. “The deals we’ve booked with xAI and others puts our AI server backlog at roughly $9 billion as of today.”

Looking ahead, Dell forecasts fiscal 2026 revenue between $101 billion and $105 billion, with adjusted EPS of $9.30. This compares to analysts’ expectations of $103.81 billion in revenue and adjusted EPS of $9.28.

Following the release, Dell shares increased by 2% in extended trading on Thursday. Over the past year, shares have gained around 14% as of Thursday’s close.