Dell Technologies Inc. cited strong demand for artificial intelligence servers as the reason for its extremely bullish revenue guidance today, sending its stock higher in the after-hours trading session.

The company issued its forecast shortly after posting mixed first-quarter financial results, where it beat analysts’ expectations on sales but came up short on earnings.

The company reported earnings before certain costs such as stock compensation of $1.55 per share, falling some way short of Wall Street’s target of $1.69. But it made up for it with revenue, which came to $23.38 billion in the quarter, up 5% from a year earlier and above the $23.14 billion forecast. All told, it delivered net income of $965 million, down slightly from the $992 million profit it recorded in the year-ago period.

Investors were willing to forgive the mixed results once they saw Dell’s guidance for the current quarter, though. The company said it’s looking for second-quarter sales of between $28.5 billion and $29.5 billion, which is quite a bit higher than the $25.26 billion consensus estimate. It’s also looking for earnings of $2.25 per share in the current quarter, ahead of the Street’s target of $2.18.

Dell said the strong guidance stems from its hopes that it will ship more than $7 billion worth of AI systems during the quarter. Those systems are notably much higher-margin than its standard data center servers and storage arrays.

The company also reiterated its full-year revenue forecast of around $103 billion at the midpoint of its guidance range, in line with the Street’s expectations, but bumped up its annual earnings outlook to $9.40 per share, up from $9.30 before and ahead of the Street’s call for $9.17.

Dell has emerged as one of the primary vendors for companies looking to buy AI systems powered by Nvidia Corp.’s graphics processing units, along with the likes of Hewlett Packard Enterprise Co. and Super Micro Computer Inc. In a conference call today, the company said it was seeing “unprecedented demand” for its AI systems, especially from “second-tier cloud providers” such as the now publicly traded Coreweave Inc.

Dell Chief Operating Officer Jeff Clarke (pictured) said the company bagged $12.1 billion worth of orders for AI systems in the first quarter, “surpassing the entirety of shipments” it received in fiscal 2025. He added that the company now has a $14.4 billion backlog for AI servers waiting to be shipped to customers.

According to Clarke, those numbers will turn into recorded revenue once the company ships the systems to its clients. It’s expecting AI server sales to top $15 billion in fiscal 2026, up from $10 billion the year before. That said, Clarke told analysts on the conference call that while the AI market is exciting, it’s also somewhat “lumpy.”

“The customer deployments we have in front of us are large, and they’re complex,” he said. “The dependencies in this business are waiting for data centers to be built, power to be provided directly with cooling infrastructure. We’re orchestrating a highly complex supply chain.”

Dell’s AI servers fall within its Infrastructure Solutions Group, which generated $10.3 billion in sales during the quarter, up 12% from a year earlier. Servers accounted for the bulk of those sales at $6.3 billion, while $4 billion was from systems that store data.

The report came a week after Dell hosted its annual user conference, Dell Technologies World, where much of the focus was on the company’s AI strategy. There, Clarke appeared on SiliconANGLE Media’s livestreaming studio theCUBE, where he talked about how the company is looking to drive the next industrial revolution with AI:

The company also has an even bigger business called the Client Solutions Group, which sells personal computers, and it generated just over $12.5 billion in sales during the quarter. Dell is pitching high-end “AI PCs” and gaming rigs in its PC business, and it said it’s expecting the market to recover in fiscal 2026 following a slump last year. But the division’s overall profitability slipped due to what Clarke said was “pricing pressure from rivals.”

Revenue from consumer PCs fell 19% from a year earlier, while the unit’s total operating income was down 16%.

Dell also revealed that it has stepped up its shareholder capital returns during the quarter, spending $2.4 billion on share repurchases and dividends. In the whole of fiscal 2025, it spent $2.58 billion on buying back shares.

Holger Mueller of Constellation Research Inc. praised Dell’s performance, saying it has capitalized well on the demand for AI inference. “It’s easy to see that’s the case, for server and networking revenue increased more than 16%, while the storage segment only rose 6%, barely beating inflation,” the analyst pointed out. “If Dell’s customers were training AI models locally, we would see more storage sales, but that doesn’t appear to be the case.”

Investors were pleased enough with Dell’s results, for the company’s stock gained just over 2% in late-trading. The after-hours action means its stock is now down just 1% in the year to date.

Dell’s results came just a day after its biggest rival in the PC market, HP Inc., missed expectations on earnings and saw its stock fall more than 8%. That company issued a weak profit outlook and slashed its annual earnings forecast, citing concerns about the economy and U.S. President Trump’s trade tariffs.

Another of Dell’s rivals, NetApp Inc., was also down in the dumps today after issuing soft revenue guidance for the current quarter. The company, which competes with Dell in the data center segment, said it’s looking for second-quarter sales of $1.53 billion at the midpoint of its range, way below the analyst’s view of $1.6 billion.

The company did OK in the quarter just gone, reporting earnings of $1.93 per share on sales of $1.73 billion, surpassing the Street’s targets of $1.90 in earnings and $1.72 billion in revenue. But investors were clearly worried about its future prospects, and NetApp’s stock fell more than 5% in late trading.

Photo: SiliconANGLE