Dell stock jumped 213% YTD as investors bid on server demand surge from AI infrastructure buildout.
Dell Technologies shares have surged 213.2% year to date, driven primarily by extraordinary growth in its AI infrastructure business. In the first quarter of fiscal 2027, AI server orders reached $24.4 billion, with AI server revenues jumping 757% year over year to $16.1 billion. The company's AI server backlog expanded to $51.3 billion, and management projects $60 billion in AI server revenues for fiscal 2027—nearly 2.4 times last year's level.
Dell's customer base has grown to exceed 5,000 accounts spanning hyperscalers, neocloud providers, sovereign AI projects, and enterprises, providing strong visibility into continued expansion. The company guided fiscal 2027 revenues between $165 billion and $169 billion, representing 47% year-over-year growth at the midpoint, with non-GAAP earnings of $17.90 per share (plus or minus 25 cents).
This performance has significantly outpaced peers. Hewlett Packard Enterprise and Apple have returned 71.6% and 13.5% year to date, respectively, while Super Micro Computer has declined 7%. Dell has emerged as a key supplier of AI-optimized servers and data center solutions, leveraging partnerships with NVIDIA and other leading chipmakers to deliver high-performance AI systems. Its integrated rack-scale systems and data center solutions allow customers to deploy AI clusters efficiently while managing total cost of ownership.
Growth extends beyond AI infrastructure. Dell's traditional server business grew 92% year over year in the first quarter of fiscal 2027, supported by enterprise data center modernization and replacement of aging infrastructure. Management highlighted broad-based demand across all geographies. Storage revenues increased 8%, marking the fifth consecutive quarter of above-market growth in Dell-IP storage. These dynamics lifted Infrastructure Solutions Group revenues 181% year over year and operating income 206%.
Dell continues expanding its AI Factory ecosystem with partners including NVIDIA, Google Cloud, OpenAI, Palantir, and ServiceNow, while new offerings such as Dell PowerRack, 18th-generation PowerEdge servers, and the AI Data Platform position the company as a full-stack AI infrastructure provider. Management noted that customers increasingly prefer integrated, production-ready AI infrastructure rather than standalone hardware, supporting continued market share gains.
However, Dell faces headwinds that could constrain growth. Management repeatedly cited memory constraints—both DRAM and NAND—as the primary supply bottleneck, with demand continuing to exceed available supply. Complex manufacturing and deployment requirements make supply-chain execution crucial for sustaining current growth rates. Additionally, gross margin declined to 18.1% due to a mix shift toward lower-margin AI servers. Management stated that AI server profitability remains in the mid-single-digit operating margin range, below storage margins, potentially limiting margin expansion as AI becomes an increasingly larger percentage of revenues.
Competition remains fierce across multiple segments. In the PC market, Dell competes with Apple, HP, and Lenovo. According to Gartner, the PC segment grew 4% in the first quarter of calendar 2026, with Apple outperforming at 9.5% shipment growth compared to Dell's 7.6% and Lenovo's growth. HP's shipments declined 4.9%. In AI infrastructure, Dell faces pressure from Hewlett Packard Enterprise and Super Micro Computer.
In valuation terms, Dell trades at a premium relative to peers. The company trades at 1.45X forward 12-month price-to-sales, compared to 0.32X for Super Micro Computer and 1.12X for Hewlett Packard Enterprise. Technically, Dell shares are trading above both the 50- and 200-day moving averages, indicating a bullish trend.
Dell's prospects remain anchored to strong AI infrastructure demand, supported by an expanding client base across neoclouds, sovereigns, and enterprises. The company's impressive liquidity position and positioned-as-a-full-stack provider should sustain top-line growth momentum and justify its current premium valuation.