Dell Technologies (NYSE: DELL) reported second-quarter fiscal 2027 results on September 1, 2026 that blew past consensus on almost every line the AI-server thesis rests on: revenue, orders, and backlog all hit records, and management raised full-year guidance for the second time this fiscal year. Shares that closed the regular session down 6.8% at $425 traded roughly 10% higher in after-hours dealing on the numbers.
The headline print, from Dell’s press release: $47.0 billion in revenue (up 58% year-over-year), non-GAAP diluted EPS of $7.04 (up 203%), and an AI-optimized server backlog of $95 billion — a figure that now dwarfs a full year of AI-server shipments at the current run-rate.1
The quarter in one table
| Metric | Q2 FY27 | YoY change |
|---|---|---|
| Total revenue | $47.0B | +58% |
| ISG (Infrastructure) | $31.8B | +89% |
| AI-optimized servers | $16.4B | +100% |
| Servers & networking (all) | $26.9B | +107% |
| CSG (Client Solutions) | $15.0B | +20% |
| AI server orders (quarter) | $60.9B | record |
| AI server backlog | $95.0B | record |
| GAAP diluted EPS | $6.34 | +273% |
| Non-GAAP diluted EPS | $7.04 | +203% |
| Operating cash flow | $2.2B | — |
| Cash returned to shareholders | $4.3B | record |
ISG is now the whole story
Dell’s Infrastructure Solutions Group generated $31.8 billion in the quarter, up 89% year-over-year, and accounted for 68% of total revenue. Inside ISG, the AI-optimized server line is running at a scale that would have been unimaginable eighteen months ago: $16.4 billion in a single quarter, doubled from a year earlier.1
Two numbers matter more than the shipped revenue itself. First, $60.9 billion in AI-server orders booked in the quarter — nearly four times the AI-server revenue actually recognized. Second, the $95 billion AI backlog, up from $14.4 billion at the end of Q2 FY26. In other words, Dell is booking orders faster than it can build the systems, and the pipeline the company has visibility on is now larger than its full-year AI-server revenue guide.
Traditional servers are participating too
Often lost in the AI headline is that Dell’s non-AI “traditional” server and networking business grew 122% year-over-year in the quarter, reaching $10.5 billion. Enterprises are still refreshing general-purpose infrastructure — the mix inside ISG has tilted decisively toward AI, but the base business is not shrinking.
Client Solutions: quietly healthy
The PC business, which the market largely writes off in every Dell narrative, delivered $15.0 billion of revenue (up 20% YoY), with commercial PCs the driver. That is the strongest CSG print Dell has posted in years and cuts against the persistent “PC market is dead” framing. Dell continues to bundle AI-PC refresh cycles into commercial accounts alongside its server sales.
Guidance: raised again
The second raise of fiscal 2027 was the piece Wall Street cared about most.
| Guide | Prior FY27 outlook | New FY27 outlook |
|---|---|---|
| Total revenue | $167.0B | $192.0B (+69% YoY) |
| AI-optimized servers | n/a | $74.0B (+200% YoY) |
| GAAP diluted EPS | $17.31 | $24.37 |
| Non-GAAP diluted EPS | $17.90 | $25.50 |
The Q3 FY27 guide — $49.0 billion in revenue (up 81% YoY), non-GAAP EPS of $6.50 — implies the AI-server ramp is not moderating and is now running well ahead of the pace analysts had modeled coming into the print.
AI-server revenue trajectory, in one picture
What the market chose to focus on
Two things drove the aggressive after-hours move. The first is that the $95 billion backlog is roughly 1.3x the FY27 AI-server revenue guide, which reframes the guide as a near-term supply/build constraint rather than a demand ceiling. The second is that non-GAAP EPS came in at $7.04 versus a Street consensus in the roughly $4.87 area implied by Investing.com’s beat/miss data — a $2.17 beat on the bottom line is unusual for a name this size.2
Analysts moved quickly. Bank of America Securities had already lifted its price target to $505 (from $500) on August 31 with a Buy rating; the current published range across covering analysts spans $360 to $700 with an average near $511, per data on Yahoo Finance.3
Risks that did not go away
The AI-server margin profile remains lower than Dell’s legacy storage and traditional-server business, and gross-margin percentage compression as AI mix rises is a recurring analyst concern in Dell’s own risk disclosures. Supply of accelerators (GPUs and, increasingly, custom silicon) is the binding constraint on how fast the backlog converts to revenue, and any hyperscaler capex pause would show up first in the orders line — which is why the $60.9 billion Q2 order figure matters more than the shipped revenue in the print.
Bottom line
Q2 FY27 gives Dell bulls what they needed on every quantitative axis: revenue beat, EPS beat, orders record, backlog record, and a second in-year raise to the full-year guide. It also sets a very high bar. FY27 revenue of $192 billion implies more than $99 billion in second-half revenue against $87 billion in the first half — a step-up that is achievable but leaves little room for slippage in the AI-server build schedule. The next data point is Dell’s Q3 FY27 release in late November 2026.
Sources
- Dell Technologies Delivers Second Quarter Fiscal 2027 Financial Results — Business Wire via Yahoo Finance, Sep 1, 2026 (primary press release, all revenue/EPS/backlog figures).
- DELL stock quote — Yahoo Finance (regular-session close $425, -6.8%; after-hours ~+10%; analyst target range).
- Dell news — Investing.com (consensus non-GAAP EPS $4.87; $2.17 beat).
Disclosure: This article is for informational purposes only and is not investment advice.