Dell Just Proved It’s No Longer Just a PC Company. AI Servers Are Rewriting Its Entire Business.

Dell Technologies reported record fourth-quarter results after the close Thursday, posting $33.4 billion in revenue, up 39% year over year, and non-GAAP EPS of $3.89, both well above estimates. The stock jumped over 12% in after-hours trading. The headline: AI infrastructure is now the engine of Dell’s growth.

By the numbers

Dell’s Infrastructure Solutions Group, which houses its server and networking business, posted revenue of $19.6 billion, up 73% from a year ago. Server and networking revenue alone more than doubled, driven almost entirely by AI server demand. Dell’s AI server backlog expanded to $22 billion. For the full fiscal year, Dell hit $113.5 billion in revenue (a record, up 19%) and returned $7.5 billion to shareholders.

Why this is a bigger deal than it looks

Dell has quietly become one of the most important beneficiaries of the AI infrastructure buildout. While Nvidia makes the chips, someone has to build the physical servers, racks, and storage that house them. That’s Dell. The company guided FY2027 revenue to $138 billion to $142 billion, implying roughly 23% growth at the midpoint, far above the Street’s $124.9 billion estimate. That kind of guidance from a hardware company would have been unthinkable five years ago.

What to watch

The key question going forward is margins. AI servers typically carry lower margins than traditional enterprise hardware because the GPU components (mostly from Nvidia) are expensive. Dell’s ability to grow profitability alongside massive top-line growth will determine whether the stock continues to rerate higher.

Sources: CNBC, Bloomberg, Yahoo Finance, Dell Earnings Call