Dell is the latest company to get a massive windfall from the AI boom.
The tech company reported record annual revenue of $113.5 billion on Thursday, up 19% in its financial year ending January 30.
Jeff Clarke, Dell’s vice chairman and chief operating officer, said it had been “a defining year for the company” in an earnings call on Thursday.
Annual revenue in the company’s Infrastructure Solutions Group (ISG), which sells servers and storage infrastructure, was up 40% across the financial year, and Dell projected sales would continue to surge in 2027.
The Texas-based company said it expected AI-optimized server sales to grow 103% and deliver $50 billion in revenue in the current financial year.
Dell’s shares were up more than 10% in premarket trading on Friday morning as investors cheered the blockbuster results.
A recent slew of similarly strong earnings results from industry leaders like Nvidia and Meta have helped calm investors’ fears of an impending “AI bubble.”
“The AI opportunity is meaningfully growing and transforming the company,” said Clarke in a press release.
“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,” said Clarke.
Alongside competitors like HP and Lenovo, Dell raised product prices across both its divisions in December amid industry-wide shortages of key storage and memory components that power AI.
The increases led to some “sticker shock” for Dell’s servers and storage customers, Clarke said on the call. However, they quickly grasped “the gravity of the situation,” and the “most sophisticated customers in the world began to move aggressively to protect their infrastructure build outs,” he said.
Dell’s business is split into two key divisions: the Infrastructure Solutions Group (ISG), which sells storage and servers, and the Client Solutions Group (CSG), which sells PC and other hardware.
While Dell’s AI business is booming, its traditional PC line has been struggling. In July, Clarke announced he would take on “day-to-day leadership” of the CSG division to “help accelerate decision-making and build momentum.’
In the 2026 financial year, annual revenue in CSG grew by 5% — an increase compared to last year, when revenue in the division declined by 1%.
As Dell positions itself for the future, it has been reshaping operations across the board, from headcount to the tools employees use.
The changes have included a 25,000 reduction in staff numbers, in the last two years — an almost 20% drop, RTO mandates, and significant changes to how sales staff earn commission, as Business Insider reported exclusively in February.
Dell is also preparing for a major overhaul of its internal systems in May, which it told staff will be the “biggest transformation in company history,” according to an internal memo seen by Business Insider in January.
The goal is to modernize and standardize the underlying infrastructure that Dell runs on to help prepare it for the AI future.
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