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Dell revenues rose 5% in Q1 FY26 to reach $23.4bn, driven by growth across all of its core markets. Strong demand for AI-optimised servers continued, building on the momentum throughout FY25. The business also booked $12.1bn in orders in the first quarter, surpassing the entirety of shipments in all of FY25.
The Infrastructure service group (ISG) saw servers and networking revenue up 16% to a record $6.3bn, whilst storage revenue was up 6% to $4bn. The Client Solutions Group (CSG) saw revenue grow 5% to $12.5bn, with commercial Client revenue up 9% to $11bn. Dell said while the PC refresh remains behind prior cycles, it is seeing indicators that the installed base is upgrading to new Windows 11 PCs, many of them AI PCs. The consumer market meanwhile continues to perform poorly, with revenue declining -19% and industry pricing highly competitive.
AI continues to be the key driver for growth across hardware, software and services, with enterprise AI customers growing across key industry verticals, including Web Tech, Financial Services Industry, Manufacturing, Media & Entertainment and Education. Dell is also applying GenAI internally, such as the use of a Digital Service Assistant to increase its diagnostic and resolution ability.
Strengthening partnerships is also an area of focus for Dell, with the firm announcing a new collaboration with Google to bring Gemini on-prem – exclusively for Dell customers, as well as a partnership with AI model supplier Cohere to simplify the deployment of Agentic technology on-prem. Dell also released its Private Cloud and Automation platform, designed to simplify the deployment, management and scaling of private cloud environments.
Full-year FY26 revenue is expected to grow 8% yoy to between $101bn and $105bn, with 16% growth forecast for Q2, suggesting AI demand is expected to remain strong despite current market turbulence and uncertainty.
Posted by: Simon Baxter at 09:56