Dell Technologies Projects $15 Billion AI Server Revenue For FY26, Raises Dividend By 18% Amid A Mixed Quarter

Dell Technologies Inc. DELL reported a mixed fourth quarter, however, the management announced an 18% increase in annual dividend and said that it expects the artificial intelligence server business to grow by at least $15 billion in the fiscal year 2026.

What Happened: Despite a revenue miss in the fourth quarter, Dell’s management remained positive on its AI server business for the fiscal year 2026 during the earnings call.

Talking about the outlook, COO Jeff Clarke said, “We expect our AI business will grow to at least $15 billion given our robust opportunity pipeline, our engineering, our services and financing advantages. This AI business drives incremental operating profit and is EPS-accretive.”

Dell’s ISG business or Infrastructure Solutions Group unit that provides IT infrastructure, software, and services was also expected to grow because of the strength in the AI business.

CEO Yvonne McGill said, ISG will grow in the high teens, driven by $15 billion of AI server shipments and continued growth in traditional server and storage.

The CFO further said that the company will continue to update this estimate.

Why It Matters: Dell topped fourth quarter earnings estimates with EPS of $2.68, but missed on revenue at $23.9 billion. For fiscal 2026, Dell forecasts revenue of $101-$105 billion and adjusted EPS of $9.30, roughly in line with analyst expectations.

“We're raising our annual dividend by 18%, demonstrating our commitment to shareholder return and confidence in our opportunity to grow in FY26,” said CEO McGill.

Price Action: Dell declined 6.77% on Thursday and fell further 1.23% in after-hours, this outpaced the 2.66% fall in the SPDR S&P 500 ETF Trust SPY, which tracks the S&P 500 index.

The stock remains 7.47% lower on a year-to-date basis, however, it’s up 15.64% over a year.

Benzinga tracks 20 analysts with an average price target of $134.05 for the stock, reflecting a “buy” rating. Estimates range widely from $53 to $185. Recent ratings from Northland Citigroup, B of A Securities, and Morgan Stanley average $141, suggesting a potential 32.39% upside.