Dell Posts Monster Quarter on AI Server Surge

CNBC reported Friday that shares of Dell Technologies CEO Michael Dell‘s namesake company rocketed 32%, putting it on course for its best single session since returning to public markets in 2018.

Dell’s AI Server Revenue Shatters Expectations

Dell AI server revenue was the headline number that stunned Wall Street. First-quarter AI server sales reached $16.1 billion, a 757% increase from the same period a year ago. Overall quarterly revenue climbed nearly 88% year over year. That marked the fastest growth pace for any quarter since Dell relisted in 2018. Adjusted earnings per share landed at $4.86, far above analyst expectations of $2.94.

Ben Reitzes, head of technology research at Melius, told CNBC he had “never seen anything like” the quarter. He noted the company beat every line in its financial model, calling it exceptional execution beyond pure AI tailwinds. Morgan Stanley analysts, meanwhile, admitted they “got this one wrong,” describing the print as among the most impressive hardware quarters they had ever covered.

What Is Driving the AI Server Boom

Dell’s server business benefits directly from surging enterprise appetite for AI infrastructure. Its machines are packed with graphics processing units sourced largely from Nvidia, whose chips have become essential for running large AI workloads. That dependency links Dell’s fortunes tightly to the broader AI capital expenditure wave sweeping corporate America.

Background: A Year of Rapid Ascent

Even before Friday’s dramatic move, Dell’s stock had nearly tripled over the prior twelve months. The company has cultivated close ties with the current White House. President Trump publicly urged Americans to buy Dell shares during a May event, and ethics filings show he personally purchased between $1 million and $5 million in Dell stock in February. That same month, Michael Dell and his wife announced a $6.25 billion philanthropic contribution linked to Trump-backed children’s savings accounts.

Pentagon Deal Adds Fuel

Just days before the earnings release, Dell landed a $9.7 billion Pentagon software contract, supplying a broad suite of technology to the U.S. military. The deal reinforced the company’s push into government markets and gave investors an additional reason to reassess its long-term revenue trajectory heading into Friday’s session.

Analysts across multiple firms said price targets and models were under immediate review following the surprise results.

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