Dell Technologies does not attract the same conversation as the chip names, which may be the point. While Nvidia, AMD, and Broadcom absorb the bulk of AI infrastructure attention, Dell is sitting on a $95 billion AI server backlog, raised its full-year revenue guidance to $192 billion, and trades at roughly 19 times forward earnings. That is not a cheap stock by any historical standard for Dell. Relative to what the business is producing, it is not expensive either.
The fiscal second quarter, reported September 1, was the kind of result that scrambles analyst models. Revenue came in at $46.97 billion, up 58% year over year. Non-GAAP earnings per share reached $7.04, beating the $4.92 consensus by 43%. GAAP net income more than tripled. Within the Infrastructure Solutions Group, which includes AI-optimized servers, revenue climbed 89% to $31.8 billion. AI server revenue alone hit $16.4 billion, roughly double the prior quarter.
The backlog is the number that commands the most attention. Dell booked a record $60.9 billion in AI server orders during the quarter and exited with $95 billion in unfulfilled backlog. That is forward revenue already contracted, sitting in a queue. Management raised its full-year non-GAAP EPS guidance to $25.50 and lifted revenue expectations to $192 billion, well above the $172 billion analysts had modeled before the report.
Why Wall Street Is Paying Attention
CFO David Kennedy said on the earnings call that momentum was continuing across every line of business. The PC recovery is real, with traditional servers, networking, and storage all growing alongside the AI server segment. Dell is not a one-product story. The breadth of that performance is what gives the AI backlog its credibility: a company that is executing broadly tends to execute on the segments it is highlighting.
The stock hit a fresh 52-week high of $595.51 on September 18 before settling near $575 on September 21. Year to date, shares have gained more than 300%. For Q3, Dell guided to $49 billion in revenue, implying 81% growth, and $6.50 in adjusted EPS. Analysts had been expecting about $41.4 billion and roughly $4.57 per share. The guide was not incremental. It reset the bar substantially.
What Could Go Wrong
Insider selling has picked up. The CFO disclosed the sale of 23,896 shares at about $585 on September 17. The general counsel sold 6,000 shares at about $547.56 on September 11. Insiders sell for many reasons, but concentrated selling near a 52-week high in a stock up 300% draws legitimate attention.
Dell’s AI server margins are thinner than its traditional hardware margins. The company passes through expensive GPU costs from Nvidia, which compresses gross margins even as revenue surges. If GPU pricing rises further or supply tightens unpredictably, margins could disappoint even as revenue holds. Component supply is the constraint investors are watching most carefully ahead of Q3.
The Bottom Line
Dell is expected to report Q3 FY2027 results in late November. The combination of a record backlog, a raised guide that looked conservative at issuance, and a forward multiple that lags the rest of the AI infrastructure complex makes the stock worth serious attention. It is not the flashiest name in the trade. That may be why it is still available at 19 times earnings.
