Dell Technologies' chief financial officer, David Kennedy, told investors at Citi's 2026 Global TMT Conference on September 10 that demand for AI‑focused servers is outpacing the company's financial reporting cycle. The firm booked $6.1 bn of AI server orders in the second quarter alone, matching the total booked in the prior three quarters, and reached $13.2 bn in AI bookings over the last 12 months.
The AI backlog now stands at roughly $95 bn, with the majority allocated to data‑center readiness. Kennedy highlighted that AI servers are generating mid‑single‑digit margins, while the Infrastructure Solutions Group posted a record 15% margin. Traditional server revenue grew 122% year‑over‑year, and storage revenue rose 26% year‑over‑year, driven by strong performance across the PowerStore, PowerScale and ObjectScale portfolios. PowerStore logged ten consecutive quarters of double‑digit growth, PowerScale five quarters, and ObjectScale four quarters.
Dell raised its fiscal 2027 guidance by 70% relative to earlier analyst expectations. The company added $2.5 bn to its profit‑and‑loss statement from storage growth, and expects operating leverage of about 4.5 percentage points for the year. Operating expenses now represent 8% of revenue, the lowest level in Dell's 42‑year history, down from 20% six years ago.
The enterprise AI customer base expanded to more than 6,500 clients, a rise of over 60% in the past six months, representing an estimated 10%‑15% of the broader enterprise market. In the commercial PC segment, Dell noted an installed base of over 400 million PCs that are older than four years, while consumer PC shipments are projected to decline 18%‑20%.
Supply constraints remain a focus. Shortages of DRAM, NAND and CPUs are tightening, and AI‑specific components such as optics, transceivers and T‑glass are also under pressure. Kennedy said conditions are expected to worsen in 2026 compared with 2025. To mitigate risk, Dell shifted wafer supply from consumer PCs to infrastructure products for the second half of the year.
Financially, Dell increased share repurchases from $1.6 bn in the first quarter to $3.9 bn in the second quarter, a 90‑day jump. The stock has delivered a 329% return year‑to‑date, with analyst price targets ranging between $465 and $735. Kennedy corrected a prior S&P Global report, stating that debt allocated to Dell Financial Services represents 14%‑20% of the balance sheet, not the previously reported $10‑$21 bn range.
Kennedy emphasized Dell's operational advantage, noting a "time to token" advantage of four to six weeks over competitors and system uptime of 99.9%. He also described complexity as a friend, underscoring the company's focus on scaling its storage and AI offerings while maintaining a prudent financing approach.
