The arrival of artificial intelligence (AI) has breathed new life into Dell Technologies (DELL +0.47%) stock. Shares skyrocketed to a multi-year high of $514 on Aug. 13. The key catalyst behind the rising stock price has been demand for the computer maker's products to support a global build-out of AI infrastructure.
Dell shares could rise still higher after Sept. 1. That's when the company announces financial results for its fiscal 2027 second quarter. Dell has been on a roll, successfully capturing demand for AI compute. Its fiscal Q2 earnings could exceed the kind of outstanding performance seen to date, as AI hyperscalers continue to spend large sums on data centers to house artificial intelligence systems.
Here's a deeper look into why Dell stock is poised to soar.
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What's driving Dell stock's meteoric rise
Dell shares shot up at the end of May after the company announced earnings for its fiscal Q1, ended May 1. It's easy to see why. The computing giant achieved record revenue of $43.8 billion, representing a jaw-dropping 88% year-over-year increase. That sum blew past Dell's Q1 sales guidance of $34.7 billion to $35.7 billion.
The stock continued to climb as it secured large deals, such as its August announcement to supply equipment for AI infrastructure platform provider Volta's construction of an enormous AI factory in Norway. Wall Street analyst upgrades fueled further share price gains, with Evercore reiterating a buy rating and raising its price target to $550 from $500.
For its fiscal Q2, Dell forecast revenue between $44 billion and $45 billion. While that represents outstanding growth compared to the prior year's $29.8 billion, it's not much of an increase over Q1's sales. Yet AI hyperscalers, such as Meta Platforms and Microsoft, are on pace to spend far more this year than they did in 2025, when capital expenditures totaled a massive $410.2 billion. They've spent over $300 billion through the first half of 2026. This suggests Dell's revenue could end up higher than its outlook indicates.
NYSE: DELL
Key Data Points
Factors behind Dell's sales growth
A further sign that Dell could see another blowout quarter is its impressive AI server backlog, which reached a record $51.3 billion in Q1. Chief Operating Officer Jeff Clarke said on the earnings call, "Our pipeline continued to grow sequentially and remains multiples of our backlog, even after converting $24.4 billion into orders."
Clarke also noted that many customers are using older servers, presenting an upgrade opportunity. Adding fuel to this fire is an industry shortage in computer memory. This has resulted in Dell's customers putting in orders far in advance to secure the required components. Consequently, the company is likely to see inflated sales in the second quarter. Management expects this increased customer focus on securing infrastructure equipment to continue throughout the remainder of 2026.
Given these tailwinds, Dell is well-positioned to deliver another quarter of blowout earnings. If it can manage costs and grow its high-margin storage business, which achieved record Q1 revenue of $4.3 billion, the company's margins could see a boost similar to Q1. In that quarter, gross margin rose 58% year over year, contributing to a 256% jump in net income to $3.4 billion. With Sept. 1 fast approaching, those who bought Dell stock may see yet another multi-year high in the share price.
