Did The Market Read Dell Stock Right?
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Dell Technologies (DELL) stock returned 110.1% since November 5, 2025, outpacing the 9.5% return for the S&P 500. Sales of Dell’s servers built for AI grew rapidly over that year, and the company raised its revenue forecast for fiscal 2027 on September 1, 2026. The biggest one-day gain came on May 29, 2026, when shares jumped 32.8% after Dell reported fiscal Q1 2027 results and lifted its full-year outlook. But did buyers pay up faster than Dell’s profit grew?
Dell’s Profit Grew Faster Than Its Share Price
Dell earned $17.23 a share over the twelve months to July 31, 2026, compared with $6.86 a year earlier. At the November 5 close, the stock traded at 18.0 times those earnings. That multiple sits below the 19.9 times it fetched at the end of September 2025, so the price rose less than the profit behind it.
Sales grew more slowly than profit, climbing 49.0% over the same twelve months. Revenue grew 10.8% in fiscal Q3 2026, the quarter that ended October 31, 2025. In fiscal Q2 2027, Dell reported $47.0 billion, up 57.7% from a year earlier.
Along the way, though, buyers did pay ahead of the profit. The stock traded at 30.5 times the same twelve months of earnings at the end of September 2026. Shares then lost 45.2% between October 7 and November 5, 2026, while the S&P 500 fell 5.7%.
How Much Of Dell’s Sales Come From AI Servers?
AI servers accounted for about 35% of sales in fiscal Q2 2027. Management said on the September 1 call that Dell recognized $16.4 billion of AI server revenue that quarter, out of the $47.0 billion total.
Those sales sit within Dell’s servers-and-storage unit. Revenue for that segment reached $60.8 billion in fiscal 2026, outpacing the $51.0 billion generated by its PC unit. That marks a reversal from fiscal 2025, when PCs brought in more.
Management expects AI server revenue to triple to $74 billion in fiscal 2027, out of $192 billion of total revenue at the midpoint. At that forecast, AI servers would make up close to 40% of Dell’s sales for the year.
Dell’s Gross Margin Holds Near A Fifth Of Sales
Dell’s gross margin, the share of sales left after the cost of the products, was 19.8% over the twelve months to July 31, 2026, compared with 19.0% five years earlier. Dell grew much larger, but each dollar of sales still leaves about the same gross profit.
Dell’s operating margin, the share of sales left after all running costs, rose to 9.6% over the twelve months to July 31, 2026, up from 7.1% a year earlier. On the September 1 call, management said scale was the single biggest lever of that improvement. Even so, Dell’s operating margin remains about half the S&P 500’s operating margin of 18.9%.
Dell’s gross margin, which sat at 20.9% in fiscal Q2 2027, is the figure to watch when the company reports fiscal Q3 2027, expected in November 2026.
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