Dell earnings preview: Fiscal Q2 2027

Ahead of Dell Technologies Inc.'s (NYSE: DELL) fiscal Q2 earnings release next week, consensus expects total revenue of $45.1 billion and diluted non-GAAP EPS of $4.91. For the Infrastructure Solutions Group (ISG) segment, revenue is projected at $29.8 billion, driven by an expected $16 billion from AI-optimized servers. ISG gross margin is expected to be 19.2% for the quarter, with a consensus operating margin of 11%. This margin is expected to remain in H2 to deliver a full year margin of 11%.

Commentary on the company’s AI server backlog and any indications about the magnitude that enterprise customers are planning to refresh PCs will be important for assessing the outlook. In addition, it will be interesting to hear management’s perspective on the magnitude and trajectory of demand for storage from the AI opportunity. The potential timing of the refresh cycle and AI pipeline are worth watching in H2 and for next year.

AI servers still in focus

Looking further out, analysts remain bullish on the demand for AI servers. Analysts expect AI server revenue to reach $65.8 billion in fiscal 2027 and $86.2 billion in fiscal 2028, lifting expected total company revenue to more than $200 billion. Within Dell’s Infrastructure Solutions Group (ISG), revenue is projected to rise by over 20% to $143 billion in fiscal 2028, with nearly all of the year-over-year increase attributed to AI servers. ISG operating profit margin is expected to stay at 11% in both fiscal 2027 and fiscal 2028, though questions remain about how quickly margins can return to the prior 13% range.

According to Visible Alpha consensus, EPS is expected to grow by more than 20% from $19.12 per share in fiscal 2027 to $23.20 per share in fiscal 2028. Estimates range from $18.85 to $28.92 per share, putting the fiscal 2028 P/E consensus at 20x, and in the range of around 16x to 25x. Dell’s stock has risen nearly 50% since the last earnings release and is up almost 300% since February 2026. The consensus target price is $505, implying a roughly 9% return.

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.