Dell's stock soars 32% after record AI sales and $9.7B Pentagon deal

Dell Technologies saw its stock price surge by roughly 32% on Friday, marking what could be its best single-day gain ever. The jump followed a series of strong financial results and a major Pentagon contract worth $9.7 billion for military software solutions. The company’s first-quarter revenue soared by nearly 88% compared to last year. AI server sales alone hit $16.1 billion, a staggering 757% increase from the previous period. Conventional server revenue also nearly doubled year over year, while storage solutions grew at their fastest pace in three years.

Dell’s adjusted earnings per share came in at $4.86, far exceeding Wall Street’s $2.94 estimate. The PC division’s operating margins reached near-record levels, prompting the company to raise its full-year revenue guidance by about 40%. Its revised AI revenue forecast now suggests 144% annual growth, with overall revenue expected to climb roughly 50%. Analysts responded swiftly to the results. J.P. Morgan lifted its price target from $280 to $500, admitting it had underestimated Dell’s potential. Susquehanna went further, upgrading the stock to Positive and setting a new target of $700, up from $138. The momentum was further boosted by Dell securing a $9.7 billion Pentagon deal to provide software solutions for U.S. military operations.

The sharp rise in Dell’s share price reflects both its explosive revenue growth and strengthened market position. With AI server sales skyrocketing and a major defence contract in hand, the company’s financial outlook has improved significantly. Analysts have adjusted their expectations upward, signalling confidence in its continued expansion.