DELL.N released its FY2027 Q2 results (quarter ended Jul 2026) after the U.S. close on Sep 2 Beijing time.

1. AI revenue: Within ISG, growth in AI servers was modest QoQ this quarter. That is not a concern, as new orders surged again and backlog exploded.

AI server revenue was Approx. $16.4bn, up $0.3bn QoQ and ahead of market estimates (~$15.8bn).New AI orders jumped to $60.9bn, taking AI backlog to $95.0bn by quarter-end. Dolphin Research estimates AI server revenue could approach ~$20bn next quarter, rising by $3bn+ QoQ, with the Rubin ramp unlocking faster AI revenue.

2. Guidance: $Dell Tech(DELL.US) guides Q3 FY2027 revenue of ~$49.0bn, ahead of the Street (~$44.0bn). Q3 GAAP EPS is guided to ~$6, above the Street (~$4).

With full-year guidance raised to $190-194bn (vs. $165-169bn last quarter), well above the Street’s revised $170-180bn, Q4 revenue can be inferred at ~$50-54bn, implying only a $1-5bn QoQ increase. Even with Rubin ramping, this full-year guide still looks conservative, and management may lift it again.

3. Ops metrics: Revenue was ~$47.0bn, +58% YoY and ahead of the Street (~$45.0bn). QoQ revenue rose by ~$3.1bn, driven mainly by ISG.

GPM was ~21%, up 300bps QoQ, well above the Street (~17.4%). Gross margin rebounded sharply (pricing as the primary driver, mix as secondary). To offset higher storage costs, the company raised prices across product lines, easing concerns over 'revenue up but profit flat'.

4. ISG (Infrastructure Solutions): Includes traditional servers, AI servers, and storage.

ISG revenue was ~$31.8bn, +$2.8bn QoQ, far above the Street (~$29.7bn). The QoQ delta was mainly driven by traditional servers; AI was relatively flat QoQ.

Traditional servers contributed ~$10.5bn, +122% YoY and above the Street (~$9.4bn), the key source of the beat. Demand was driven by two factors: (1) upgrades across the installed base, and (2) substantial CPU compute needed to support AI and agentic workflows.

5. CSG (Client Solutions): Revenue was ~$15.0bn, +20% YoY and in line with the Street (~$15.0bn). Growth was mainly pricing-led.

Client revenue remains commercial-heavy. Commercial revenue was ~$13.2bn, +22% YoY, while consumer revenue was ~$1.84bn, +7% YoY.

Minutes pleaseclick

Dolphin take: AI orders are off the charts, pricing protects margins, guidance remains conservative.

DELL delivered an across-the-board beat, with a ~$3.1bn QoQ revenue uplift driven by ISG (servers). Traditional server refresh demand was particularly strong.

AI revenue reached ~$16.4bn, up ~$0.3bn QoQ, beating the Street (~$15.8bn). New AI orders surged to ~$60.9bn, taking backlog to ~$95.0bn.

AI backlog has climbed for three consecutive quarters ($43.0bn → $51.3bn → $95.0bn), while this quarter’s AI revenue only rose ~$0.3bn QoQ. This signals demand remains robust, constrained by upstream supply. As Rubin ramps in 2H, AI revenue should accelerate.

Management raised FY2027 (CY2026) revenue guidance to $190-194bn, +$25bn vs. last quarter’s $165-169bn. If Q4 lands at ~$50-54bn, and given Rubin’s ramp, Dolphin Research still views guidance as conservative and expects a potential move above ~$195bn.

Beyond the print, the market is watching the following.

1) AI servers

DELL shipped its first GB200 NVL72 rack to CoreWeave and maintains deep collaboration with NVDA. DELL now offers customers Blackwell and Vera Rubin configurations and is involved in NVDA’s next-gen Feynman platform.

Post-earnings, NVDA raised its CY2027 outlook: (1) five major CSPs’ capex to ~$1.3tn (vs. prior market view $1.1-1.2tn); (2) FY2028 (corresponding to CY2027) revenue growth guide of 70%+ (vs. prior ~40%).

As part of NVDA’s ecosystem, DELL investors expect higher full-year guidance and even an outlook for the next fiscal year (FY2028).

DELL offers full-stack services, spanning desktop AI workstations (GB10/GB300 DGX) → rack servers → storage → switches → software orchestration (OpenManage) → services (installation, tuning, 24/7 support). This end-to-end capability positions DELL to win more AI cloud and enterprise deals.

2) CSG (PC)

With storage tight, the PC market remains pressured; Q2 global PC shipments were ~68.2mn units, down YoY. DELL’s CSG revenue rose 20% YoY, which Dolphin Research attributes mainly to ASPs (partly passing through storage price increases), while units remain constrained by soft market demand.

Consensus expects storage prices to peak in 1H FY2027 and ease in 2H. Most storage majors have LTAs in place; even if prices retrace, a sharp collapse is unlikely, and levels may stay relatively high. This should ‘partially alleviate’ PC pressure rather than make it ‘disappear’.

DELL’s current market cap is ~$276bn, implying ~12x PE on FY2028 (CY2027) post-tax core OP (assuming 2-year revenue CAGR of ~36%, GPM ~17%, tax rate ~17.5%). Historically trading at ~8-20x PE, DELL now sits below the midpoint after the earnings upgrade.

Compared with other AI ecosystem names, DELL’s stock has pulled back less, largely due to its sizable backlog. With NVDA Rubin ramp deliveries ahead, DELL has clear growth visibility.

Two focal points in this print: (1) AI revenue rose modestly QoQ (~$0.3bn), but backlog jumped ~$44bn, underscoring strong demand constrained by supply, with Rubin shipments likely to beat, (2) pricing actions passed through storage inflation, lifting GPM, a sign of bargaining power in the chain.

Overall, this was a strong report, showcasing solid AI demand, pricing power to offset cost pressure, and a surprise from traditional servers. Even after lifting full-year guidance, management remains conservative and may raise again.

Unlike many growth narratives, DELL’s story is anchored by tangible earnings and backlog. Upward estimate revisions can directly absorb valuation; DELL now trades near ~12x PE. With NVDA’s explicit CY2027 high-growth outlook, investors look for DELL to provide next fiscal guidance on top of the raised full-year view. Rubin-driven visibility could push DELL’s multiple toward ~15x PE or above.

Below are Dolphin Research’s detailed DELL data and charts:

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Related Dolphin Research posts on DELL.N:

Earnings

May 29, 2026 call 'DELL (Trans): Demand still outstrips supply; order reserves are multiples of backlog'

May 29, 2026 earnings take 'DELL: AI surges, traditional warms, the veteran is 'fully charged'!'

Feb 27, 2026 call 'DELL (Trans): AI orders exclude Rubin; traditional can stay positive'

Feb 27, 2026 earnings take 'DELL: AI doubles; can it mute 'storage tightness' worries?'

Nov 26, 2025 call 'DELL (Trans): Value lies in L11+ end-to-end solutions'

Nov 26, 2025 earnings take 'DELL: Storage inflation adds friction; AI guidance supports'

Aug 29, 2025 earnings take 'DELL: Are 'frenzied' AI server orders just fleeting?'

Deep dive:

Jul 11, 2025 deep dive 'AI double buff: Is DELL set for another spring?'

Jul 9, 2025 deep dive 'DELL: AI tide rises; can the veteran stage a comeback?'

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