Dell Q3 2026 Earnings Report

Dell Technologies (DELL) released its fiscal third-quarter earnings Tuesday, reporting revenue that slightly trailed Wall Street’s expectations. However, the tech giant’s forecast for a robust fourth quarter, fueled by soaring demand for its AI-optimized servers, sent shares soaring 5% in after-hours trading.

Here’s a closer look at Dell’s performance against LSEG consensus estimates:

• EPS: $2.59 adjusted, exceeding the estimated $2.47
• Revenue: $27.01 billion, narrowly missing the estimated $27.13 billion

Looking ahead, Dell anticipates fourth-quarter revenue of approximately $31.5 billion, significantly surpassing analysts’ estimates of $27.59 billion. The company also projects earnings per share of $3.50 for the fourth quarter, exceeding the expected $3.21. This optimistic outlook is underpinned by a substantial upward revision in expected AI server shipments for the year, now projected at $25 billion, a notable increase from the previous $20 billion. Dell also raised its full-year revenue guidance to $111.7 billion from $107 billion.

Dell reported a net income of $1.54 billion, or $2.28 per diluted share, compared to $1.17 billion, or $1.64 per share, in the same period last year. This increase reflects a more efficient allocation of resources and a favorable product mix.

Dell’s performance provides a critical barometer for the overall health of the AI infrastructure market. As a leading provider of systems powered by Nvidia’s (NVDA) high-performance GPUs, the company is uniquely positioned to capitalize on the explosive growth in AI-related workloads. The 11% year-over-year increase in overall revenue underscores the growing demand for Dell’s comprehensive technology solutions.

Dell’s primary AI system customers include large enterprises, government agencies, and specialized “neocloud” providers like CoreWeave. These neoclouds are emerging as significant players in the AI landscape, offering on-demand access to powerful computing resources for AI model training and inference. Notably, Dell’s AI strategy differentiates itself from the hyperscale cloud providers that have historically dominated Nvidia GPU demand. This focus on enterprise and neocloud customers allows Dell to tailor its solutions to specific industry needs and deploy AI infrastructure in environments where data privacy and security are paramount.

The company anticipates selling $9.4 billion of AI servers in the fourth quarter, excluding the previously announced deal to supply Nvidia-based GB300 systems to Iren. Iren intends to lease these systems to Microsoft, indicating a strategic partnership aimed at expanding access to AI compute resources. This deal is significant as it utilizes the next generation Nvidia GB300 systems, showcasing Dell’s commitment to ensuring its customers have access to leading AI hardware.

Dell’s Infrastructure Solutions Group, encompassing its data center business, reported revenue of $14.11 billion, aligning with analyst estimates. Within this segment, servers and networking components generated $10.1 billion, reflecting a 37% year-over-year increase, largely driven by $5.6 billion in AI server shipments. The company also reported $4 billion in storage gear sales, indicative of the continued importance of data management in the AI era.

However, Dell’s Client Solutions Group, which includes its laptop and PC business, reported revenue of $12.48 billion, a 3% year-over-year increase but slightly below the analyst consensus of $12.65 billion. The decline in laptop and PC sales points to a softening in the consumer market, but the rising demands for AI related services have helped offset the losses.

During the quarter, Dell allocated $1.6 billion to share repurchases and dividends, demonstrating a commitment to returning value to shareholders.