UPDATE: Dell Technologies Inc. is experiencing an explosive surge in demand for artificial intelligence infrastructure, with its server order backlog skyrocketing to an all-time high. This unprecedented growth has led executives to significantly revise long-term financial projections, indicating that Dell is poised for a lucrative future in the AI sector.
The company disclosed that its backlog has expanded beyond previous records, paving the way for robust revenue potential extending through 2030. In its latest earnings report for the third quarter of fiscal 2026, Dell revealed that revenue from its infrastructure solutions group reached a staggering $14.1 billion, marking a remarkable 24% increase year-over-year, primarily driven by a surge in AI-optimized server demand.
Chief Executive Michael Dell celebrated this achievement on social media, stating, “Another record quarter. Grateful to our @DellTech team, customers and partners who made it happen.” This performance highlights Dell’s strategic pivot from traditional PC sales to high-margin AI systems, where interest from hyperscalers and enterprises continues to grow unabated.
As demand for AI servers intensifies, Dell’s backlog is now a key performance indicator, with the company forecasting accelerated shipments in the upcoming quarter. Analysts note that servers powered by Nvidia Corp. are a significant portion of these orders, reflecting Dell’s strategic alignment with the GPU leader.
Dell’s upgraded forecast now anticipates annual revenue growth of 7% to 9% over the next five years, up from earlier estimates. The company reported total revenue of $27 billion, an 11% increase year-over-year, along with diluted earnings per share of $2.59, which represents a 17% rise. Notably, the infrastructure segment’s operating income reached $1.7 billion, a 16% increase, underscoring strong profitability amid expansion.
Despite this success, Dell faces ongoing challenges in the supply chain. The company has made significant investments in manufacturing expansions and is collaborating with original design manufacturers to meet the soaring order volume. Recent reports indicate that Dell’s fourth-quarter revenue forecast has exceeded Wall Street expectations, thanks to data center investments, prompting shares to rise by 4% in after-hours trading.
However, not all sectors are thriving; storage revenues have dipped, with some analysts noting a “wipeout” in that area, which has tempered some of the gains from server sales. During the earnings call, executives, including Co-Chief Operating Officer Jeff Clarke, emphasized the transformative potential of AI, highlighting its critical role in Dell’s strategy.
Dell’s fiscal 2026 revenue guidance has now been raised to $111.7 billion, a significant increase from last year’s $95.6 billion. This forecast is largely driven by the escalating demand for AI solutions, even as traditional PC shipments stabilize.
Investor sentiment remains optimistic, although recent insider stock sales have drawn scrutiny. Some analysts suggest these moves by executives may coincide with the backlog surge, although filings indicate routine diversification efforts. Social media discussions underscore bullish sentiment surrounding Dell’s 69% growth in server revenue over previous quarters.
Dell’s engagement with the U.S. Department of Energy’s Genesis Mission, aimed at powering AI for scientific discovery, further solidifies its strategic positioning in the AI hardware landscape. As competition heats up from rivals like Hewlett Packard Enterprise Co. and Super Micro Computer Inc., Dell’s offerings, including its APEX as-a-service models, set it apart in the market.
Looking ahead, Dell is committed to expanding its software capabilities and integrating with open-source frameworks to facilitate AI deployments. Partnerships with Nvidia, including developments involving Blackwell GPUs, are expected to enhance performance capabilities.
For investors, the backlog—valued in tens of billions—represents a reliable stream of future cash flows, providing a buffer against cyclical downturns in the PC market. With operating cash flow reported at $8.1 billion over the trailing twelve months, Dell’s outlook hinges on effective execution amid geopolitical supply risks and constraints facing data centers.
As the tech landscape shifts towards AI-driven factories, the demand for compute resources continues to surge. Michael Dell’s social media updates, detailing fiscal revenues and growth projections, paint an optimistic picture of the company’s trajectory. Investors will be closely monitoring Q4 for backlog conversion rates and further insights into Dell’s evolving strategy in the AI ecosystem.