September 4, 2026
Record revenue, a $95 billion AI backlog, and a full-year outlook that cleared consensus by about $18 billion.
Analyst Targets
- BofA Securities: Buy, target raised to $505 from $500 (Aug 31, pre-earnings)
- Evercore ISI: target raised to $550 from $500 (Aug 18)
- Morgan Stanley: target raised to $434 from $430 (Aug 24)
- UBS: Neutral, target raised to $455 from $440 (Aug 25)
- Deutsche Bank: initiated at Hold (Sept 1, pre-earnings)
- Consensus (28 analysts, S&P Global): Buy, average target $511
The Quarter in One Sentence
Dell reported numbers on September 1 that were not supposed to happen for another year, and the Street’s target prices were written for a company that no longer exists.
Former CIA Analyst: “These Are Elon’s Next Three Moves”
The man who called the SpaceX IPO almost to the exact day says Elon is about to spend his $2.1 trillion war chest on three publicly traded companies.
Dell delivered record revenue of $47.0 billion, up 58% year-over-year, and record non-GAAP diluted EPS of $7.04, up 203% from the prior year. Results significantly exceeded Wall Street expectations, with adjusted EPS coming in about $2.14 above the roughly $4.90 forecast and revenue beating estimates by about $2.1 billion. The stock had already punished shareholders heading into it: DELL shares closed down 6.8% on Tuesday ahead of the earnings report, as broader market weakness and rising bond yields weighed on technology stocks.
Company Profile
Dell operates through two primary segments. The Infrastructure Solutions Group ships servers, storage, and networking gear; the Client Solutions Group covers PCs and peripherals. For most of Dell’s history, those two segments earned roughly equal weight. That balance is gone. Dell’s AI-optimized server business has become the gravitational center of the entire operation, and this quarter tested whether that momentum was accelerating or approaching a ceiling. The answer was unambiguous.
The Numbers
- Revenue: $47.0B vs. ~$44.9B estimate (+58% YoY)
- Non-GAAP EPS: $7.04 vs. ~$4.90 estimate (+203% YoY)
- AI server revenue: $16.4B (+100% YoY)
- AI orders booked in Q2: $60.9B (record)
- AI backlog, quarter end: $95B (record)
- Non-GAAP operating margin: 12.6% vs. 7.7% a year earlier
Traditional servers and networking grew 122%, storage rose 26%, and the Client Solutions Group climbed 20% year-over-year. Strength was broad, not narrow. One number worth watching closely: free cash flow declined 47% year-over-year to $986 million despite the record top line. Capital expenditures rose as the company scales capacity to meet AI demand.
Why the Stock Is Moving
The guidance raise is the story. For the full fiscal year ending January 29, 2027, the company now expects revenue of approximately $192 billion at the midpoint, up $25 billion from its prior outlook, and $74 billion from AI-optimized server sales. Dell elevated its full-year revenue projection to $192 billion, a substantial increase from its earlier guidance of $167 billion, a revised target that significantly exceeds the roughly $174 billion consensus forecast from analysts.
971 Trades. One Surprisingly Simple Approach.
Five years. Bull markets, selloffs, sideways stretches – and 971 trades along the way. Dave Aquino’s Ultimate Income System focuses less on predicting the next big move and more on finding consistent trading opportunities. His new report explains the approach, why it works differently, and what most traders may be missing.
Full-year adjusted EPS guidance was raised to $25.50 from the prior forecast of $17.90. That is not a rounding revision. It is a structural reassessment of what this company earns. Following the announcement, shares jumped about 8% in after-hours trading to roughly $459 after closing the regular session down 6.8% at $425. Most pre-earnings targets now sit below where the stock is trading. Revision pressure on the Street is real and immediate.
Macro Context
Dell noted several ongoing challenges, including continued supply constraints in DRAM, NAND, CPUs, disk drives, mature-node parts, and AI-related components. Those are the same bottlenecks constraining every hyperscaler buildout. Potential semiconductor tariffs on servers and PCs also sparked concern heading into the quarter. Neither issue derailed Q2, but both remain live risks as the company tries to convert a $95 billion backlog into shipped revenue. SMCI and HPE face similar supply dynamics; Dell’s scale gives it pricing leverage neither competitor can easily match.
That competitive gap is worth examining more closely before drawing conclusions about the AI server market as a whole. When SMCI reported its own results, the dynamics looked different from the outside than they did in the underlying numbers — a distinction that matters for anyone trying to size the opportunity across the infrastructure stack. our earlier breakdown of SMCI’s earnings and what Wall Street missed in AI infrastructure lays out why the headline winner in any given quarter is not always the highest-conviction position.
Forward Scenarios
Bull
The $95 billion backlog converts into revenue faster than investors expect, free cash flow recovers as the capital-spending cycle matures, and hyperscaler AI infrastructure budgets keep expanding through fiscal 2028. Evercore’s $550 target looks conservative. The $700 high-end analyst target becomes discussable.
Base
Dell executes on its $192 billion revenue guide. Margins hold in the 12% range. Analyst targets cluster toward $500 to $550 over the next 90 days as firms update models. The stock consolidates between $450 and $480 while the market digests the guidance step-change.
Jack Kellogg used to park cars for tips.
One Friday afternoon trade, held over the weekend, no charts open. Cashed out $37,212 Monday morning.
Bear
Supply constraints worsen, backlog conversion slips, and free cash flow stays depressed. Tariff risk on AI hardware components materializes. A stock trading at 22x forward earnings with declining free cash flow gives back its after-hours gains and retests the $400 level.
Technical Overlay
DELL closed September 1 at $425 after the intraday selloff, then recovered to roughly $459 in after-hours. The 52-week range runs from $110.22 to a high of $514 set on August 13. The $450 to $460 zone is where the stock spent much of August before the pre-earnings drift lower; reclaiming that range cleanly this morning would suggest the after-hours reaction holds. A failure to stay above $440 on the open reopens the mid-$420s as a near-term floor.
What Investors Should Watch
- Analyst target revisions over the next 48 hours; most are still anchored below ~$511
- Free cash flow trajectory in Q3, given the 47% decline this quarter
- Backlog conversion rate: a record $95 billion AI server backlog means the next several quarters are already largely spoken for, but execution pace matters
- Supply chain commentary from NVDA and SMCI on component availability
- The date Dell sets for its next earnings call, which has not been confirmed by the company yet
Bottom Line
Dell’s Q2 was not a beat. It was a reset. A $25 billion guidance raise that clears analyst consensus by about $18 billion forces every price model built before September 1 into the trash. The AI backlog gives visibility most companies cannot claim; the free cash flow decline and supply constraints remind you that converting orders into earnings is not automatic. The real question this morning is not whether Dell had a good quarter. It did. The question is whether analysts who held $500 targets on a $167 billion revenue story will move quickly enough to reflect a $192 billion one.
Dell is not the only AI infrastructure name forcing analysts to tear up their models mid-cycle. Marvell went through a similar revision dynamic after posting record revenue and raising guidance for the second consecutive quarter, putting its own analyst targets under immediate pressure. how Marvell’s back-to-back guidance raises reshaped its FY28 revenue outlook to $18 billion offers a useful parallel for gauging how quickly the Street tends to catch up when a company’s trajectory changes this sharply.
