Dell Projects Strong Growth Through 2027 Thanks to AI Technology Boom

Computer giant Dell announced Thursday it expects revenue to exceed Wall Street predictions through 2027, driven by surging demand for artificial intelligence servers. The company also boosted its dividend by 20% and added $10 billion to its stock buyback program. Dell reported record quarterly revenue of $33.4 billion, beating analyst expectations.

Technology company Dell announced Thursday its revenue projections for fiscal 2027 will surpass Wall Street expectations, fueled by increasing demand for servers designed to handle artificial intelligence workloads. The positive forecast sent Dell’s stock price climbing approximately 12% in after-hours trading.

Along with the optimistic revenue outlook, Dell revealed it will increase its cash dividend by 20% and allocate an additional $10 billion toward buying back company shares.

Major technology corporations including Alphabet, Microsoft, Amazon, and Meta are projected to invest at least $630 billion this year in building AI infrastructure, creating significant opportunities for equipment suppliers like Dell and competitor Super Micro Computer.

Rising costs for memory chips and U.S. trade restrictions related to AI infrastructure development have prompted companies such as Dell and HP Inc to raise their prices, helping them manage increased expenses.

Memory chips are essential components in virtually all servers, storing data and instructions needed to maintain high-speed processor operations that are crucial for AI applications.

Dell anticipates its AI server revenue will double, growing 103% to approximately $50 billion by fiscal 2027.

The company reported having more than 4,000 customers for its AI servers, including Elon Musk’s artificial intelligence company xAI and CoreWeave.

Dell’s annual revenue projection ranges from $138 billion to $142 billion, significantly higher than the $125.54 billion average estimate from analysts, based on LSEG data.

The shortage of memory chips is expected to reduce global consumer demand for electronic devices like personal computers, smartphones, and gaming systems. HP Inc indicated it expects fiscal 2026 performance to fall at the lower end of previous projections, while China’s Lenovo cautioned about increasing challenges for PC sales.

Dell projects annual adjusted earnings of $12.90 per share, surpassing analyst estimates of $11.59.

The company achieved record fourth-quarter revenue of $33.4 billion, exceeding the estimated $31.73 billion. Dell’s adjusted earnings per share of $3.89 also beat expectations of $3.53.

Revenue from Dell’s infrastructure solutions division, encompassing storage, software, and server products, surged 73% to $19.60 billion. Meanwhile, sales from the client solutions group, which includes personal computers, increased 14% to $13.49 billion.