Dell Technologies closed up 15.81% at $492.20 after a fiscal second-quarter earnings beat and a $25 billion guidance raise, pushing the stock up 294.64% year to date. Underneath the move, gross margin stood at 21.1% and free cash flow fell 47.22%, showing how much of the AI-server boom's profit is landing at the component level rather than at assembly.
Dell Technologies (NYSE:DELL) closed up 15.81% at $492.20 on Wednesday, a day after reporting fiscal second-quarter results, with the stock now up 294.64% year to date.
Revenue and Backlog Beat Forecasts
Dell posted revenue of $46.971 billion, up 57.75% year over year, with adjusted EPS of $7.04 against a $4.8994 consensus. AI-optimized server revenue reached $16.401 billion, and quarterly orders hit a record $60.9 billion, pushing the backlog to $95 billion. Dell also raised its fiscal 2027 revenue outlook by $25 billion to $192 billion, with non-GAAP EPS guided to $25.50. Nur al-Din al-Hamawi, chief market strategist at Equity Group, told Bloomberg tech is "not just leading on hopes."
Margins Show a Different Story
But gross margin stood at 21.1%, and free cash flow fell to $986 million, down 47.22% year over year, despite the record revenue quarter. NVIDIA, by contrast, reported a non-GAAP gross margin of 75.0% for the same period. The gap suggests memory-price inflation is capturing profit at the component layer rather than at assembly, where Dell operates.
Peers Price the Same Trade Differently
HPE trades near $51.83 with $1.11 non-GAAP EPS, built around a networking-led story. Super Micro trades near $37, offering similar AI-server exposure but with thinner margins.
Each name now buys a different slice of the same AI supply chain, and the component layer is keeping the larger share of it.
Source: 24/7 Wall St.
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