Dell Technologies Inc. (NYSE:DELL) stock surged in premarket trading Friday after the company reported first-quarter results that topped Wall Street expectations, raised its full-year outlook, and issued stronger-than-expected guidance for the current quarter, driven by accelerating demand for artificial intelligence infrastructure.

The company also highlighted ongoing supply constraints in key semiconductor components, including memory and processors, as AI-related demand continues to exceed available supply.

AI Demand Drives Record Results

Dell reported first-quarter revenue of $43.84 billion, surpassing analyst estimates of $35.45 billion, according to Benzinga Pro. Adjusted earnings came in at $4.86 per share, well above expectations of $2.94 per share.

Revenue increased 88% from a year earlier, while adjusted earnings per share surged 214%.

Chief Operating Officer Jeff Clarke said demand remained strong across Dell’s AI and infrastructure businesses, though component shortages continue to limit supply.

Clarke said the most significant constraints remain in DRAM, NAND flash memory, and microprocessors.

Adjusted gross margin rose 57% year over year to $7.9 billion, while adjusted operating income climbed 154% to $4.2 billion.

Dell generated a record $4.1 billion in operating cash flow during the quarter and returned $2.1 billion to shareholders through dividends and share repurchases. The company ended the quarter with $14.1 billion in cash and investments.

Infrastructure Business Reaches New High

Revenue in Dell’s Infrastructure Solutions Group reached a record $29 billion, up 181% from a year earlier, supported by strong demand for AI servers, traditional servers, and storage products.

Traditional server and networking revenue jumped 92% to $8.5 billion as enterprise demand continued to outpace supply amid ongoing infrastructure modernization efforts.

Storage revenue increased 8% to $4.3 billion, driven by demand for the company’s PowerStore, PowerMax, PowerScale, and ObjectScale platforms.

Client Solutions Group revenue rose 17% to $14.6 billion. Commercial revenue increased 18%, while consumer revenue gained 9%, benefiting from enterprise PC refresh cycles and gaming demand.

Dell recorded $24.4 billion in AI-related orders during the quarter and generated $16.1 billion in AI server revenue. The company ended the period with a record AI backlog of $51.3 billion.

Management said its broader AI pipeline remains several times larger than its current backlog despite strong order conversions.

Outlook Raised

For the second quarter, Dell expects revenue of $44 billion to $45 billion and adjusted earnings of $4.80 per share. Analysts were expecting revenue of $34.99 billion and adjusted earnings of $2.98 per share.

The company raised its fiscal 2027 revenue outlook to a range of $165 billion to $169 billion, up from its previous forecast of $138 billion to $142 billion. Analysts had projected full-year revenue of $142.25 billion.

Dell also raised its full-year adjusted earnings guidance to $17.90 per share, up from $12.90, well above analysts’ projection of $13.09 per share.

The company lifted its full-year AI server revenue forecast to $60 billion and said demand continues to outstrip supply across both AI and traditional infrastructure markets, particularly for DRAM and NAND memory components.

Dell Price Action

DELL Price Action: Dell Technologies shares were up 37.99% at $437.50 during premarket trading on Friday. The stock is trading at a new 52-week high, according to Benzinga Pro data.

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