Technology and AI

A server maker has raised its forecast for artificial intelligence hardware by 14 billion dollars in a single quarter, and is carrying a 95 billion dollar backlog

By Staff Writer  |  2 September 2026

Dell Technologies reported record quarterly revenue of 47.0 billion dollars on 1 September and lifted its forecast for artificial intelligence optimised servers from 60 billion dollars to 74 billion dollars for the year. It booked 60.9 billion dollars of orders for those machines in three months and recognised 16.4 billion dollars of them as revenue, which leaves the difference sitting in a backlog somebody has to build room for.

The headline figures from the quarter to 31 July are large and mostly do what the market expected. Revenue of 46,971 million dollars, which the company rounds to 47.0 billion, up 58 per cent on the same quarter last year. Diluted earnings per share of 6.34 dollars, up 273 per cent. Full year revenue guidance lifted by 25 billion dollars to 192.0 billion. A record 4.3 billion dollars handed back to shareholders in three months.

The figure that matters to anybody who builds things is none of those. It is the gap between what was ordered and what was delivered.

That's clearest in our AI server business where we booked a record $60.9 billion in orders, recognized a record $16.4 billion in revenue and exited the quarter with a record $95 billion backlog.

Jeff Clarke, vice chairman and chief operating officer, Dell Technologies

A backlog is a building programme

Ninety five billion dollars of ordered but undelivered artificial intelligence servers is not a hardware statistic. Those machines draw far more power per rack than the equipment they sit beside, they reject far more heat, and a large part of that backlog is destined for halls that have not been fitted out, on sites that in many cases have not been energised. The order is placed long before the room exists.

That is the same demand, seen from the other end, as the connection queues American state regulators have started auditing this week. One side of the ledger shows utilities asking whether the data centres in their queues are real. The other side shows a supplier with a firm order book for the machines those buildings are meant to hold. Both can be true at once, and the reconciliation between them is where the programme risk lives.

The line nobody quotes

Buried under the artificial intelligence numbers is a figure that grew faster in percentage terms than they did. Traditional servers and networking revenue was 10,531 million dollars, up 122 per cent, against 100 per cent growth for the artificial intelligence optimised machines. Storage was up 26 per cent and the client business, meaning ordinary commercial computers, was up 20 per cent.

That pattern is worth noting for anyone modelling this market. The build-out is not only buying accelerators. It is buying the switching, the storage and the conventional compute that has to sit around them, and those lines are growing at rates the sector had stopped expecting.

With AI momentum accelerating and our opportunity expanding across the portfolio, we're raising our full-year FY27 revenue outlook by $25 billion to $192 billion, up nearly 70% year over year.

David Kennedy, chief financial officer, Dell Technologies

What to be careful about

Two cautions. The first is that an order booked is not a payment received, and a backlog of this size assumes that the buyers behind it can still fund their sites when the machines arrive. The company's own guidance carries the usual list of risks, including single source and limited source suppliers, which is precisely the exposure that a hardware supply chain running this hot creates.

The second is that the year-on-year percentages are being taken against a base that was itself unusual. Guidance of 200 per cent growth in artificial intelligence server revenue for the full year is arithmetic on a small denominator, and it will not read the same way next year whatever happens.

On the results call the company said its customer count for these machines had passed 6,500 and that it had booked more than 130 billion dollars of such orders over twelve months. Somewhere, most of that has to be given a floor, a feed and a way of getting the heat out.