Dell’s AI Backlog Is Keeping Investors From Cashing Out

Dell Technologies shares closed at $534.28 on September 14, after rising roughly 350% in 2026. The move has been spectacular, but the company’s latest numbers suggest the rally is being fueled by more than enthusiasm for artificial intelligence.

Dell’s fiscal second-quarter results, released September 1, showed revenue climbing 58% year over year to $47 billion. Non-GAAP earnings per share surged 203% to $7.04. The company then lifted its full-year fiscal 2027 revenue forecast to $192 billion, up from $167 billion previously, while raising its adjusted EPS outlook to $25.50.

The most important figure was buried in the infrastructure business. Dell booked $60.9 billion in AI-server orders during the quarter and finished with a $95 billion backlog. AI-optimized server revenue reached $16.4 billion, doubling from a year earlier. That backlog gives Dell unusual visibility, although it is not the same thing as recognized revenue or guaranteed profit.

Demand is also spreading beyond the largest cloud companies. Management said orders are coming from neocloud providers, sovereign customers and enterprises, while traditional servers and networking revenue jumped 122%. Storage revenue rose 26%. The shift matters because customers are not only buying GPU-heavy systems. They are rebuilding the surrounding infrastructure needed to move, store and protect the data those systems consume.

Dell is gaining operating leverage as the business scales. Management expects operating expenses to fall to about 8% of revenue, the lowest level in the company’s 42-year history, while its infrastructure operating margin reached 15% in the quarter. Dell also returned $4.3 billion to shareholders through buybacks and dividends.

That does not make the stock risk-free. Component shortages, especially memory, can squeeze margins, and AI servers remain a competitive hardware business. A slowdown in hyperscaler spending would hit expectations quickly. The September 14 selloff, which followed renewed concerns about AI capital spending, was a reminder that investors are trading the theme aggressively.

Still, analysts have continued raising targets. Goldman Sachs moved its target to $570, while Evercore’s Amit Daryanani set a $650 target and argued that Dell’s AI-server opportunity may extend well beyond current forecasts.

After a threefold gain, taking partial profits is defensible. But the backlog, guidance reset and broader infrastructure demand explain why investors are not rushing for the exits.