The computer hardware manufacturer reported a substantial increase in revenue from its data center artificial intelligence server business, while details of a new $9.7 billion U.S. military order were revealed. As a result, Dell's stock soared approximately 40% in after-hours trading on Thursday and opened nearly 34% higher on Friday.
Dell released its first-quarter earnings, showing revenue reaching $43.8 billion, an 88% year-over-year increase. Revenue from AI-optimized servers was $16.1 billion, accounting for over one-third of total revenue and representing a 757% year-over-year surge. Dell had previously forecast full-year AI business revenue of $50 billion in February but has now raised its expectations to $60 billion, a 144% year-over-year increase.
Dell's stock rose about 4% during regular trading hours on Thursday and continued to climb significantly after the market closed.
The U.S. Department of Defense stated that the five-year contract, officially announced on Wednesday, grants Dell a blanket purchase agreement to provide Microsoft software and related services uniformly for the Department of Defense, the U.S. Coast Guard, and intelligence agencies. This order is part of the U.S. military's initiative to restructure its software and cloud communication collaboration systems and promote AI tools across all branches.
The U.S. side noted that this single contract consolidates dozens of previously separate service agreements from different departments and is expected to save approximately $422 million in expenses annually.
Prior to this, it was disclosed that related fund managers had heavily purchased Dell stock. It was reported that on February 10, the relevant accounts completed Dell stock transactions amounting to between $1 million and $5 million. About a week later, during a speech to steelworkers in Georgia, a public figure praised Dell's CEO and urged the public to "choose Dell computers."
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