Dell Technologies (NYSE:DELL) shares climbed more than 12% in U.S. premarket trading on Friday after the company reported fourth-quarter results that exceeded expectations, driven by strong momentum in artificial intelligence infrastructure spending.
The company posted adjusted earnings per share of $3.89, comfortably ahead of the analyst consensus forecast of $3.52. Quarterly revenue reached $33.4 billion, marking a 39% increase from a year earlier and topping market expectations of $31.41 billion.
Growth was largely powered by Dell’s Infrastructure Solutions Group, where revenue from AI-optimized servers surged 342% year over year to $9.0 billion. Dell also reported a record AI server backlog totaling $43 billion, signaling continued robust demand for advanced computing systems.
The company forecasts AI server revenue for the current fiscal year to rise 103% to approximately $50 billion.
“The AI opportunity is transforming our company,” said Jeff Clarke, vice chairman and chief operating officer, in a statement. “We closed more than $64 billion in AI-optimized server orders, shipped more than $25 billion throughout the year, and are entering FY27 with record backlog of $43 billion — powerful proof that our engineering leadership and differentiated AI solutions are winning.”
Dell projected fiscal 2027 revenue in a range of $138 billion to $142 billion, significantly above the analyst consensus estimate of $124.9 billion. Annual earnings per share are expected to reach $12.90, compared with forecasts of $11.49.
The company also announced a 20% increase in its cash dividend and expanded its share repurchase authorization by $10 billion.
In a research note, analysts at BofA Securities cautioned that “while the near term is clearly strong, we are unsure of the demand elasticity” resulting from the “swift and significant price actions” implemented by Dell.
Clarke noted that rising memory chip costs contributed to recent pricing adjustments, with server prices increased on December 10 and PC pricing changes introduced on January 6.