Dell Surges 39%: AI Rally Spreads to Branded Hardware Supply Chain

Dell's after-hours stock price surged nearly 40%, reflecting the market's reassessment of AI infrastructure value. Tech giants are investing over $700 billion annually, and hardware suppliers are direct beneficiaries. (Background: The US wants to let AI grow wildly to "defeat China head-on," with Trump making a major policy reversal: flattening relevant regulations across domestic states) (Background supplement: The US Treasury officially launched the "Trump Accounts" official App: full launch on 7/4, universal stock trading starting from childhood) In after-hours trading, the stock soared nearly 40%, and the reason behind this is not simply that earnings exceeded expectations, but rather that the market is reassessing the overall value of the AI infrastructure chain. As tech giants like Alphabet and Amazon continue to increase AI capital expenditures, hardware suppliers are becoming direct beneficiaries of this investment boom. Dell not only raised its full-year AI server revenue forecast to $60 billion but also secured a $9.7 billion contract from the US Department of Defense, reflecting that AI trading is entering a more tangible phase. Dell's stock, driven by AI data center construction demand, saw Q1 revenue grow 88% year-over-year to $43.84 billion, and the company raised its fiscal 2027 AI server revenue forecast from $50 billion to approximately $60 billion. After the earnings release, the company's stock once rose about 39% in after-hours trading. This indicates that the AI boom is further transmitting from models and chips to servers, memory, storage, and data center equipment. As tech giants like Alphabet and Amazon continue to increase AI infrastructure investment, hardware manufacturers like Dell — with supply chain, customer relationships, and delivery capabilities — are becoming direct beneficiaries of the new round of AI capital expenditure cycles. Meanwhile, a division under Dell secured a $9.7 billion contract from the US Department of Defense, further strengthening market expectations for its order growth and revenue certainty. For investors, Dell's rise means AI trading is entering a more downstream and tangible phase: whoever can turn chips into deliverable data center infrastructure may gain the next round of valuation reassessment. Dell raised its full-year AI server revenue forecast to $60 billion The company's Q2 guidance exceeded market expectations Q1 revenue grew 88% year-over-year to $43.84 billion In after-hours trading, the company's stock rose about 39% A division under Dell secured a $9.7 billion contract from the US Department of Defense Dell raised its full-year revenue and profit forecasts on Thursday, showing that customer data center expansion is driving demand growth for its AI-optimized servers. These servers are powered by NVIDIA's advanced chips. Dell's customers include CoreWeave, Honeywell International, and Samsung Electronics. After the earnings release, the company's stock rose about 39% in after-hours trading. US tech giants, including Alphabet and Amazon, plan to invest over $700 billion in AI infrastructure this year, which will boost demand for servers and data center equipment, with suppliers including companies like Dell and Super Micro Computer. The strong performance shows that Dell has become one of the biggest beneficiaries amid the generative AI boom. The company has navigated the memory chip shortage crisis relatively well through price increases and supply chain adjustments. Dell COO Jeff Clarke noted on the earnings call: "We feel like we're repricing almost every day. I believe customers also feel this pressure. Unfortunately, given the inflationary environment we're currently in, I don't think this situation will change." Dell stated that it currently expects fiscal 2027 AI server revenue of approximately $60 billion, up from the previous forecast of $50 billion. The company also raised its full-year revenue forecast to $165 billion to $169 billion, a significant increase from the previous forecast of $138 billion to $142 billion. Meanwhile, Dell raised its full-year adjusted earnings per share forecast from the previous $12.90 to $17.90. In Q1, Dell's revenue grew 88% year-over-year to $43.84 billion, significantly higher than the analyst average expectation of $35.43 billion compiled by LSEG. Adjusted earnings per share were $4.86, also higher than the market expectation of $2.94. Melissa Otto, head of research at S&P Global Visible Alpha, noted: "Due to scale advantages, supplier relationships, and the ability to prioritize demand allocation, Dell is in a more favorable position compared to competitors, which helped it gain market share during the memory shortage." Dell's Infrastructure Solutions Group saw quarterly revenue grow 181%. This division includes storage, software, and server businesses. Meanwhile, the Client Solutions Group, which includes the PC business, saw sales grow 17%. The company also provided Q2 revenue and adjusted earnings per share guidance above market expectations. On Wednesday, the US Department of Defense awarded a five-year, $9.7 billion contract to a division under Dell to help manage Microsoft software licenses.