Dell Technologies (DELL) Stock: Drop Despite Record Revenue, EPS and Explosive AI Server Demand

TLDR

• Dell slips to $121.45, then rockets 10.95% to $134.75 after hours.
• Record FY26: revenue hits $113.5B, up 19%, with stronger cash flow too.
• FY27 midpoint targets $140B revenue as margins and earnings keep climbing.
• AI servers explode: $9.0B Q4 revenue, backlog $43B, orders top $64B.
• Shareholder boost: $7.5B returned, 20% dividend hike, more buybacks ahead.

Dell Technologies (DELL) shares fell 1.64% to $121.45 before surging 10.95% to $134.75 after hours. The move followed record fiscal 2026 results and strong fiscal 2027 guidance. However, the regular session decline contrasted with historic revenue, earnings, and AI server growth.

Dell Technologies Inc., DELL

Record Yearly Performance Supports Strong Outlook

Dell posted record full-year revenue of $113.5 billion, and it advanced 19% from the prior year. The company also delivered record diluted EPS and generated its strongest annual operating cash flow.  Leadership raised its capital return plans and expanded its repurchase authorization to support long-term goals.

The full-year performance reflected firm demand across major hardware categories, and it signaled broad commercial strength. The company increased its non-GAAP EPS at a steady rate and improved cash generation across regions.  Management issued higher revenue expectations for FY27 and projected continued margin gains.

Dell expects FY27 revenue to reach $140 billion at the midpoint, and it anticipates meaningful earnings growth. The company also outlined rising contributions from AI-optimized servers as orders continued to accumulate. Guidance indicated stronger first-quarter results with higher operating leverage across business units.

Fourth-Quarter Results Show Accelerating AI Momentum

Dell reported fourth-quarter revenue of $33.4 billion, and it rose 39% from a year earlier. The company also produced record EPS for the period and generated significant operating cash flow. The quarter supported a sharp after-hours share price rebound following the initial decline.

AI-optimized server shipments increased quickly as enterprise demand strengthened across global markets. This segment generated $9.0 billion in quarterly revenue, and it expanded more than threefold. The company recorded stable storage growth and higher networking activity.

The Infrastructure Solutions Group delivered record performance with broad gains across categories. The unit lifted revenue to $19.6 billion and advanced operating income at a consistent pace. However, the Client Solutions Group posted modest yearly progress as commercial activity improved.

Expanding AI Pipeline and Capital Strategy Shape FY27

Dell increased its AI-optimized server pipeline across the year, and backlog reached $43 billion entering FY27. The company stated that cumulative orders surpassed $64 billion as adoption expanded. Shipments exceeded $25 billion, and the trend pointed toward rising multi-sector deployments.

The firm also strengthened its balance sheet through record cash flow and elevated capital returns. It returned $7.5 billion during the year and repurchased 54 million shares. It approved a 20% dividend increase to reinforce shareholder programs.

Dell plans for rapid growth in FY27, and it projects AI-optimized server revenue of $50 billion. The guidance indicated continued scale across core markets and broader platform expansion. Yet the stock still recorded a daily loss before recovering sharply in extended trading.

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