Dell Just Hit a Record in AI Orders—But the Real Test Starts Now

Core Insights - Dell Technologies is experiencing significant demand growth due to artificial intelligence (AI), with record high AI orders reported in its latest financial results [2][5] - The company raised its full fiscal year 2026 guidance for both revenue and adjusted earnings per share (EPS), indicating strong future demand despite a slight revenue miss in Q3 [4][5] - Investors remain cautious about Dell's long-term position in the AI ecosystem, focusing on profitability and execution in the AI server market [3][6] Financial Performance - In Q3 FY2026, Dell reported revenue of $27.01 billion, reflecting a growth rate of 10.8%, which was below Wall Street's expectations of $27.26 billion and 11.8% growth [3] - Adjusted EPS for the quarter was $2.59, surpassing the anticipated $2.47, indicating strong profitability despite the revenue miss [3] - Dell's full FY2026 revenue guidance was raised to $111.7 billion from $107 billion, and adjusted EPS guidance increased to $9.92 from $9.55 [4] AI Demand and Market Reaction - Dell recorded AI server orders of $12.4 billion, with an AI server backlog increasing to $18.4 billion from $11.7 billion in Q2 FY2026, highlighting strong customer demand [5] - The market reacted positively to Dell's results, with shares rising 5.8% on November 26, contributing to a nearly 17% return in 2025 [5] - The company needs to effectively manage AI server demand and improve margins to solidify its position as a leader in the AI market [6][7]