Dell Technologies Q1 2026 Earnings Beat Expectations, Citing AI Server Surge

Dell Technologies surpasses Wall Street forecasts for Q1 2026, driven by soaring demand for AI-optimized servers and robust enterprise infrastructure sales.

Dell Technologies reported stronger-than-expected financial results for its fiscal first quarter of 2026 on Thursday, as the company capitalized on surging demand for artificial intelligence (AI) servers and enterprise technology infrastructure amid a wider industry pivot toward advanced computing solutions.

Dell’s Q1 2026 Financial Results Exceed Forecasts

Dell Technologies (NYSE: DELL), one of the world’s largest computer and infrastructure providers, posted fiscal Q1 2026 earnings that significantly surpassed analyst projections. The company reported adjusted earnings per share (EPS) of $1.27 on revenue of $22.24 billion, compared with consensus estimates of $1.16 EPS on $21.65 billion in revenue, according to data cited by CNBC.

“We’re seeing incredibly strong demand for our AI-optimized servers and solutions,” said Jeff Clarke, Dell’s co-chief operating officer, in a prepared statement. “Enterprises are ramping up their purchasing to support new AI workloads, and Dell’s broad portfolio puts us in a unique position to serve this transformation.”

Surge in AI Server Sales Reflects Industry Trends

Growth in Infrastructure Solutions Group

Dell’s Infrastructure Solutions Group (ISG)—which includes servers, storage, and networking equipment—was a key driver of the quarter’s outperformance. ISG revenue rose 22% year-over-year to $10.7 billion, with AI server sales reportedly tripling from the same period last year.

“Our server backlog is at record levels due to overwhelming demand for AI accelerators and GPUs,” said Chuck Whitten, Dell’s co-chief operating officer, in Thursday’s earnings call. “We expect this momentum to continue as customers increasingly embrace generative AI applications.”

Key ISG highlights:

Storage revenue: $4.6 billion (up 9% YoY)

Server and networking revenue: $6.1 billion (up 35% YoY)

Management emphasized continued investments in partnerships with key chipmakers such as Nvidia and AMD to address chip shortages and supply chain constraints.

Broader Enterprise Focus Amid PC Market Recovery

Dell’s Client Solutions Group (CSG), which covers commercial and consumer PCs, returned to growth after several quarters of sluggish performance. CSG revenue was $11.8 billion, up 5% from the previous year, as corporate clients resumed device upgrades and spending stabilized in the consumer segment.

“The PC market is showing early signs of recovery,” said Yvonne McGill, Dell’s CFO. “We’re well-positioned to capture both the rebound in device sales and the ongoing, higher-value enterprise deployments.”

Analyst Reactions and Forward Guidance

Wall Street analysts widely praised Dell’s execution and commentary on sustained AI infrastructure demand. “Dell demonstrated impressive top-line growth and margin stability in AI and enterprise markets, despite global macro uncertainties,” wrote Evercore ISI analyst Amit Daryanani in a research note.

Looking ahead:

Dell forecast Q2 2026 revenue between $23.5 billion and $24.2 billion, ahead of analysts’ consensus.

The company reiterated its focus on higher-margin infrastructure and AI-driven opportunities, noting continued supply-demand mismatch for high-performance GPUs and compute accelerators.

Risks and Competitive Context

Navigating Supply Chain Headwinds

Dell acknowledged ongoing supply chain challenges, particularly around Graphics Processing Units (GPUs) needed for AI servers. “We’re working closely with our partners to secure consistent supply,” said Clarke, warning of potential bottlenecks through the fiscal year.

Competition Intensifies in AI Infrastructure

The company faces fierce competition in the AI hardware and enterprise infrastructure space, with players like Hewlett Packard Enterprise (HPE), Lenovo, and Super Micro Computer expanding their AI-focused portfolios.

“Dell’s scale and integration are strengths, but the market is moving quickly and customers want tailored solutions,” commented Patrick Moorhead, founder of Moor Insights & Strategy, in a CNBC interview. “Speed of innovation and supply chain execution will be critical.”

Dell’s Strategic Transformation and AI Roadmap

Dell continues to emphasize its shift from traditional PC dominance to providing end-to-end enterprise technology solutions, with a particular focus on AI and edge computing.

The company recently announced expanded collaborations with Nvidia to deliver turnkey AI data center solutions, and new CloudIQ management features to streamline multi-cloud operations.

“AI is driving a generational shift within IT,” said Michael Dell, CEO, in a statement. “We are building the foundational infrastructure to power this new era.”

Sources:

CNBC: Dell Technologies reports fiscal Q1 2026 earnings

Dell Technologies Q1 2026 earnings press release (company website)

Yahoo Finance Dell historical earnings data

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