Dell Technologies delivered robust first quarter fiscal 2026 results that exceeded expectations across key metrics, demonstrating the company’s successful pivot toward AI infrastructure while maintaining strength in its core enterprise business. The company reported revenue of $23.4 billion, representing a 5% year-over-year increase that surpassed analyst estimates of $23.14 billion. Most notably, Dell generated record AI orders of $12.1 billion in the quarter alone, surpassing the entirety of AI shipments for all of fiscal 2025 and building a substantial $14.4 billion AI backlog. The results showcase Dell’s strategic positioning in the rapidly expanding artificial intelligence market while highlighting some challenges in the consumer PC segment.

Key Takeaways

• AI momentum accelerating rapidly: Dell’s AI business achieved unprecedented scale with $12.1 billion in orders during Q1, demonstrating the company’s leadership position in AI-optimized server infrastructure
• Infrastructure business driving growth: The Infrastructure Solutions Group became the primary growth engine, with 12% revenue growth and 36% operating income expansion, led by record server and networking performance
• Consumer weakness persisting: Consumer PC revenue declined 19% year-over-year, reflecting ongoing market challenges and customer hesitation around traditional PC purchases
• Exceptional cash generation: Record first-quarter operating cash flow of $2.8 billion enabled the company to return $2.4 billion to shareholders, more than doubling the quarterly average since fiscal 2023
• Strong margin expansion in core segments: Despite mixed revenue performance, operating income grew 21% year-over-year, indicating improved operational efficiency and favorable product mix shifts

What’s Significant

The most significant development was Dell’s dramatic acceleration in AI business, with quarterly AI orders of $12.1 billion representing more than the company shipped in all of fiscal 2025. This positions Dell as a major beneficiary of the enterprise AI infrastructure buildout. The company’s partnership ecosystem, including collaborations with NVIDIA, Meta Platforms, and AMD, appears to be driving substantial competitive advantages in the AI server market. Additionally, the Infrastructure Solutions Group’s 36% operating income growth demonstrates Dell’s ability to capture premium pricing and margins in high-demand AI and enterprise server markets.

Financial Performance:

• • Revenue:  $23.4 billion, up 5% year-over-year, exceeding analyst estimates of $23.14 billion

    • Infrastructure Solutions Group: $10.3 billion, up 12% year-over-year, driven by AI server demand

    •  Servers and networking: Record $6.3 billion, up 16% year-over-year

    • Storage: $4.0 billion, up 6% year-over-year

    • Client Solutions Group: $12.5 billion, up 5% year-over-year

    • Commercial client revenue: $11.0 billion, up 9% year-over-year

    •  Consumer revenue: $1.5 billion, down 19% year-over-year, reflecting weak PC market conditions

  • GAAP Net Income: $965 million, down 3% year-over-year from $992 million, indicating pressure from higher costs despite revenue growth

  • EPS: GAAP diluted EPS: $1.37, flat year-over-year but exceeding analyst estimates of $1.19

  • CapEx: Capital expenditures and capitalized software: $568 million in Q1 FY26, compared to $596 million in the prior year period, showing disciplined investment approach

Business Highlights:

• AI Infrastructure Leadership: Dell’s AI-optimized servers, including the PowerEdge 9680, captured unprecedented demand with $12.1 billion in orders and a $14.4 billion backlog, positioning the company as a key beneficiary of enterprise AI adoption
• Strategic Partnerships Expanding: Enhanced collaborations with NVIDIA for next-generation PowerEdge servers and AI acceleration, plus partnerships with Meta Platforms for Llama 2 model deployment and AMD for telecom AI solutions
•  Infrastructure Segment Strength: ISG operating income surged 36% to $1.0 billion, representing 60% of total reportable segment operating income, up from 49% in the prior year
• Market Share Gains: Dell maintained top-three market positions in personal computers, peripheral displays, mainstream servers, and external storage while expanding in high-growth AI segments
• Operational Excellence: Achieved record first-quarter cash flow generation while expanding gross margins and reducing operating expenses as a percentage of revenue
• Consumer Challenges: The 19% decline in consumer revenue and 16% drop in Client Solutions Group operating income reflect ongoing headwinds from delayed PC refresh cycles and customer evaluation of AI-enabled PCs

Outlook:

Dell provided optimistic guidance reflecting confidence in sustained AI demand and enterprise infrastructure spending momentum. For the second quarter of fiscal 2026, the company expects revenue between $28.5 billion and $29.5 billion, representing 16% year-over-year growth at the midpoint of $29.0 billion. GAAP diluted EPS is projected at $1.85 at the midpoint, reflecting 50% year-over-year growth, while non-GAAP diluted EPS is expected to reach $2.25 at the midpoint, up 15% year-over-year.

For the full fiscal year 2026, Dell anticipates revenue between $101.0 billion and $105.0 billion, representing 8% year-over-year growth at the midpoint of $103.0 billion. The company expects full-year GAAP diluted EPS of $7.99 at the midpoint, up 25% year-over-year, and non-GAAP diluted EPS of $9.40 at the midpoint, reflecting 15% growth. This guidance implies accelerating growth momentum as AI infrastructure deployments scale and enterprise customers continue modernizing their data center capabilities.

The outlook reflects Dell’s strategic positioning to capitalize on the estimated $15 billion AI server revenue opportunity, with analysts projecting potential for EPS exceeding $10 as the AI infrastructure cycle matures. However, the company faces headwinds from trade tensions, competitive pricing pressures in traditional markets, and the ongoing weakness in consumer PC demand that may persist as customers evaluate next-generation AI-enabled devices.

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