Dell Technologies stock surged after the company significantly raised its full-year revenue and profit outlook, driven by explosive demand for its AI servers. Shares rose sharply in extended trading, extending a recent rally as the company secured a major U.S. government contract. Dell now forecasts AI server revenue of approximately $60 billion for fiscal 2027, up from a prior expectation of $50 billion.
Dell Technologies stock soared following an upgraded annual forecast, cementing its status as a major beneficiary of the generative AI boom. The company’s shares climbed around 30% in extended trading, continuing a 53% rally over the prior month.
The U.S. government recently announced a $9.7 billion contract with Dell. This followed a period where the stock rose 57% after a public endorsement in May.
Dell now expects AI server revenue of roughly $60 billion for fiscal 2027, a substantial increase from its prior $50 billion outlook. Its total annual revenue forecast was raised to a range between $165 billion and $169 billion.
This marks a sharp rise from a previous forecast of $138 billion to $142 billion. The company recently reported better-than-expected Q1 revenue of $43.84 billion and adjusted EPS of $4.86.
AI-related demand and server sales were cited as major growth drivers. Chief Operating Officer Jeff Clarke commented on the pricing environment during a post-earnings call.
“We’re repricing, it feels like, every day. And I’m sure our customers feel that pain. Unfortunately, I don’t see that changing given the world that we’re living in today where you have an inflationary environment,” Clarke stated. The company subsequently issued second-quarter revenue and profit forecasts that exceeded market estimates.
