Dell Technologies reports record Q2 FY2026 revenue of $29.8bn, fueled by AI server demand

Overview

Dell Technologies delivered record results in the second quarter of fiscal 2026, as revenue surged 19% year-over-year, driven by extraordinary demand for AI servers. The Infrastructure Solutions Group posted its strongest quarter ever, while Client Solutions Group remained stable despite softer consumer demand. With record cash generation and increased shareholder returns, Dell raised its AI shipment guidance for the year, underscoring its central role in enterprise AI infrastructure.

“In Q2, we achieved strong top-line results and profitability, reaching record revenue of $29.8 billion. We delivered another quarter of robust cash generation, with $2.5 billion in cash flow from operations and $1.3 billion in shareholder returns”, said Yvonne McGill, chief financial officer, Dell Technologies.

Q2 FY2026 vs. Q2 FY2025:

• Total revenue was $29.8bn (+19% YoY), marking a record quarter for the company.
  • Infrastructure Solutions Group (ISG) revenue surged to $16.8bn (+44% YoY), driven by record Servers and Networking revenue of $12.9bn (+69% YoY) as AI system shipments exceeded $10bn in 1H FY26. Storage declined to $3.9bn (-3% YoY), while operating income rose to $1.5bn (+14% YoY).
  • Client Solutions Group (CSG) revenue grew to $12.5bn (+1% YoY), with Commercial revenue up to $10.8bn (+2% YoY) and Consumer revenue down to $1.7bn (-7% YoY). Operating income was $803m (-2% YoY), pressured by weaker consumer spending.
• GAAP operating income rose to $1.8bn (+27% YoY), while non-GAAP operating income grew to $2.3bn (+10% YoY), reflecting both top-line growth and operating leverage.
• GAAP net income was $1.16bn (+32% YoY), while non-GAAP net income reached $1.59bn (+13% YoY).
• GAAP diluted EPS increased to $1.70 (+38% YoY), while non-GAAP diluted EPS hit a record $2.32 (+19% YoY).
• Operating cash flow nearly doubled to $2.5bn (+90% YoY), with adjusted free cash flow up to $2.5bn (+96% YoY), underscoring robust cash generation.
• Dell returned $1.3bn to shareholders through dividends and buybacks during the quarter.

For Q3 FY2026, Dell expects revenue between $26.5bn-$27.5bn (+11% YoY at midpoint) with GAAP diluted EPS of $2.07 and non-GAAP EPS of $2.45. For the full year FY2026, Dell guided revenue of $105bn-$109bn (+12% YoY midpoint), GAAP EPS of $7.98 (+25% YoY), and non-GAAP EPS of $9.55 (+17% YoY). Management raised its AI server shipment outlook to $20bn for FY26, citing sustained demand momentum and Dell’s leadership position in AI infrastructure.

Despite posting record quarterly results, Dell shares plunged nearly -9% in a single trading session after the company fell short of Wall Street expectations. The drop pushed the stock below the 50-day SMA ($129.02) for the first time in several months, signaling a potential shift in momentum. The 200-day SMA ($113.46) now stands out as the next major support level, which could prove critical if the downward trend continues. The RSI has slipped to 36.99, nearing oversold territory, which might offer the potential for a short-term rebound. On a year-to-date basis, Dell remains modestly positive, up about +5%, though investor sentiment will likely depend on whether the stock can stabilize above the 200-day moving average.

Author: Ionuț-Adrian Lazar