What Changed In Dell’s Story?
Dell Technologies’ (DELL) management no longer leads its earnings calls with the topic it stressed two years ago. That topic has not disappeared. Management still talks about it. The business behind it still brought in $51.0 billion, about 45% of Dell’s revenue, in fiscal 2026. So it matters to you. What did Dell’s management use to lead with?
Dell Used To Lead With The PC Refresh
Dell’s management used to lead with the PC refresh. A refresh is when customers replace their aging computers with new ones in large numbers. Management spoke of “the coming PC refresh cycle” on the fiscal Q3 2025 call, in November 2024. Management added that customers were timing their upgrades to new AI PCs.
That focus fit the business at the time. In fiscal 2025, the PC business brought in $48.4 billion, more than the $43.6 billion from servers and storage. On the fiscal Q4 2025 call, in February 2025, management put AI orders at just $1.7 billion for the quarter. Now, Dell’s calls lead with something else.
What Does Dell Lead With Now?
Dell no longer leads with the PC refresh. Dell now leads with AI server orders. On the fiscal Q2 2027 call, in September 2026, management reported a record $60.9 billion in AI orders in the quarter. That is more than 35 times the level of early 2025.
The full-year segment figures show the same shift. In fiscal 2026, servers and storage, reported as the Infrastructure Solutions Group, brought in $60.8 billion, up 40%. The PC business, reported as the Client Solutions Group, brought in $51.0 billion, up 5.4%. So servers and storage overtook PCs in a single year.
The gap kept widening in the latest quarter. Server and storage revenue grew 89% from a year earlier, while PC revenue grew 20%. The PC business, at $15 billion, took in less than AI servers alone, at $16.4 billion. The PC business is still growing, so what did the latest call say about the PC market ahead?
The Latest Call Flags A Softer PC Market
Management expects PC revenue to grow in the mid-teens for fiscal 2027 as a whole. Executives said on the latest call that the PC market will likely shrink in units in the second half of the year. Executives also said more cost-sensitive customers are putting off upgrades. Earlier this year, seeing signs the PC market would soften in the second half, Dell steered scarce components toward servers and storage.
PC profitability is set to slip as well. Operating margin is the share of sales left as profit after operating costs. Management said it expects the PC operating margin to moderate to roughly 6%, down from 7.6% in fiscal Q2 2027. Management links the drop to balancing demand, share, and profitability.
For you as a holder, this shift looks more reassuring than concerning. The PC refresh stopped leading Dell’s calls while PC revenue was still rising. Management still expects PC revenue to grow in the mid-teens for fiscal 2027, helped by the first half’s 20%-type growth. Management also says delayed upgrades leave more older devices in use and widen the later refresh opportunity.
The concern is narrower: the PC business is where the pressure shows first. Watch its operating margin in Dell’s fiscal Q3 2027 results, the next quarterly report. A margin near the roughly 6% guide would show the PC business on track while servers and storage get the scarce parts. A margin well below that guide would mean the PC story changed for the worse, not just stopped leading the calls.
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