Key Highlights
- Dell Technologies reports fiscal Q1 2027 results after the closing bell Thursday, May 28
- Wall Street consensus calls for $3.00 earnings per share and $34.95 billion in revenue — representing a 49% year-over-year surge
- The company began FY2027 holding a $43 billion AI server order backlog following more than $25 billion in deliveries
- Bank of America maintained its Buy rating and lifted the price target to $280, citing expectations Dell will exceed forecasts and raise guidance
- DELL shares opened Thursday at $243.00, climbing 3.3%, within a 52-week trading range of $106.38–$263.99
Dell Technologies faces a critical test when it unveils fiscal Q1 2027 earnings on May 28: demonstrating whether its surging AI server operations can generate substantial profits, not merely impressive top-line figures.
DELL stock opened Thursday trading at $243.00, posting a 3.3% gain and valuing the technology giant at approximately $156.9 billion. The shares have experienced a remarkable rally, with the 200-day moving average positioned at just $151.57 — indicating the stock has surged considerably beyond its recent trading history.
Wall Street analysts are projecting Dell will deliver earnings per share of $3.00 alongside revenue of $34.95 billion for the first quarter. This would mark a dramatic 49% revenue increase versus the comparable period last year, when AI server sales were still in acceleration mode.
Dell’s internal projections are somewhat more cautious, targeting $2.90 EPS for Q1 and $12.90 EPS across the complete fiscal year. However, the company has a track record of exceeding analyst expectations — in the previous quarter, it posted $3.89 EPS against a $3.53 consensus, while revenue of $33.38 billion surpassed the $31.60 billion forecast.
AI Server Business Powers Growth
The Infrastructure Solutions Group (ISG) represents the primary catalyst behind Dell’s valuation expansion. In the most recent quarter, ISG revenue surged 73% year-over-year to reach $19.6 billion. AI-optimized server systems accounted for approximately 46% of that total.
Dell concluded fiscal 2026 with $64 billion in total AI server orders. The company fulfilled over $25 billion worth and entered FY2027 carrying a $43 billion backlog. Management has set expectations for roughly $50 billion in AI-optimized server revenue during this fiscal year — representing more than double the prior year’s performance.
To achieve that objective, investors will be looking for AI server revenue in the $12–$13 billion neighborhood this quarter.
Profitability Takes Priority Over Revenue
Revenue expansion is largely anticipated. What market participants genuinely care about is whether Dell can sustain healthy profit margins.
When Dell ships AI servers equipped with Nvidia GPUs, revenue accelerates rapidly — but GPU and memory components generally deliver lower margins. ISG’s operating margin fluctuated from 18.1% in Q4 FY25 down to 8.8% in Q2 FY26 before rebounding to 14.8% in Q4 FY26. That improvement demonstrated some operational efficiency gaining traction.
For this quarter, a margin landing in the low-to-mid teens would probably be viewed positively if AI server shipment volumes remain robust.
The Client Solutions Group, responsible for PC sales, continues underperforming. Revenue growth has been limited to low single digits and operating profitability has contracted — but it’s becoming progressively less relevant to the investment thesis.
Trading at 18.7x forward earnings, DELL now commands a 68% premium above its five-year historical average of 11.1x. This elevated multiple reflects Wall Street viewing Dell as an AI infrastructure provider rather than merely a PC manufacturer.
Bank of America reaffirmed its Buy recommendation and increased the price target to $280 from $246, projecting Dell will surpass estimates and elevate full-year projections. Mizuho also maintains an Outperform stance with a $260 target. Goldman Sachs upgraded its target to $230.
The aggregate Wall Street rating stands at Moderate Buy, featuring 12 Buy ratings, 4 Hold ratings, and 1 Sell rating among 17 current analyst assessments. The mean price target sits at $218.87 — which, interestingly, trails the current stock price.
Dell also increased its quarterly dividend to $0.63 per share from $0.53, establishing a $2.52 annualized dividend with approximately a 1% yield.
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