As lately as a number of years in the past, Dell gave the impression to be a reputation destined for the enterprise historical past books. The inventory misplaced practically a 3rd of its worth in 2022, and it was exhausting to see the as soon as iconic PC-maker’s place in a post-PC world. Then one thing extraordinary occurred. Within the span of two years, Dell quietly constructed a $25 billion AI infrastructure enterprise from scratch, posted whole firm report revenues of $113.5 billion, and it’s now guiding Wall Road towards $50 billion in AI server gross sales subsequent yr alone.
Not too long ago Fortune visited Dell’s CFO in New York to search out out extra about how the corporate pulled off one thing nearly no firm of its measurement has managed to do: Reinvent itself in actual time. David Kennedy is a 27-year veteran of Dell, and was confirmed as CFO in November 2025 after serving as interim. In a convention room overlooking the chaos of thirty fourth Road, Kennedy walks me by means of the latest report efficiency posted by the Spherical Rock, Texas-based large (No. 44 on the Fortune 500).
“If you take the 12 months we’ve just finished, we did $34 billion in AI-optimized server orders in Q4, which tapped us up to $64 billion for the full year, and we exited the year with $43 billion in backlog,” Kennedy mentioned. Fourth-quarter AI server income alone surged 342% to $9 billion. “What’s super exciting is our next five-quarter pipeline of opportunities has never been higher.”
For fiscal 2027, Dell has guided for $50 billion in AI-optimized server income, representing 103% progress year-over-year. Kennedy attributed demand to international curiosity throughout neo-clouds, sovereign AI deployments, and Dell’s enterprise base. “The fear of being left behind,” he mentioned, “is becoming more powerful.”
Financial institution of America analysts lately raised their forecasts for Dell’s AI-servers, growing their estimate for the present quarter to about $15 billion and lifting their full-year projection to roughly $60 billion, citing stronger-than-expected demand. Morningstar additionally elevated its honest worth estimate, noting that sustained AI demand can be key to long-term upside.
If there’s a cloud over the in any other case sunny outlook, it’s provide. Kennedy was direct: there merely aren’t sufficient parts within the ecosystem to totally fulfill AI infrastructure demand. “I’d love more supply still,” he mentioned.
However Kennedy argues Dell’s multi-decade provider relationships give it an edge over opponents in securing what’s out there. And in contrast to some friends, Dell supplied a full-year fiscal 2027 steerage — a sign, Kennedy mentioned, that the corporate has provide commitments to help it.
On the query of AI server profitability, a subject that has made some traders nervous, Kennedy was unfazed. Dell targets mid-single-digit working margins on its AI infrastructure enterprise, a determine it has maintained persistently. “Mid-single digits on $50 billion,” he mentioned, “is a lot of dollars.”
On the core of Dell’s technique is what Kennedy calls an “AI factory,” which is an end-to-end infrastructure stack constructed round information. That features GPU-powered servers developed with Nvidia, a large-scale storage enterprise, and networking methods.
“It’s all about data,” Kennedy mentioned. “How do you manage it, store it, use it, deploy it?” He mentioned Dell’s capability to construct, deploy, and repair methods at 99.9%-plus uptime has helped differentiate it and strengthen buyer relationships.
The corporate now has greater than 4,000 enterprise AI factories deployed with prospects, together with greater than 750 added within the fourth quarter alone.
Contained in the finance perform: Agentic AI
Dell has spent the previous two years modernizing and standardizing its methods to organize for broader AI adoption. That basis is now enabling the corporate to scale agentic AI internally, Kennedy mentioned.
The OpEx self-discipline has include a workforce discount. Dell’s whole headcount fell roughly 10%, or about 11,000 staff, in fiscal 2026, in keeping with its 10-Okay submitting, which is the third consecutive yr of comparable declines. The corporate has spent $569 million in severance in the latest fiscal yr. Dell mentioned in its 10-Okay that fiscal 2026 headcount reductions stemmed from worker reorganizations, limits on exterior hiring, and different cost-alignment measures tied to its enterprise modernization efforts. “Despite these difficult decisions, we continue focused efforts to empower our employees and attract, develop, and retain talent,” the corporate acknowledged.
Concerning agentic AI, Kennedy has a give attention to the finance perform. “I’ve started to deploy agents to do reconciliations, do accounting journal entries,” he mentioned. “We’ve launched digital twins in our supply chain and services organizations. We have our own internal sales chat CRM model, which has handed back multiple hours per week to our sales force.”
His view on workforce influence is that AI redistributes effort towards higher-value work. “The accountability level is still there,” he mentioned, pointing to relationships with auditors and regulators. “All they’re doing is getting help in getting faster decisions, quicker.”
He additionally emphasised the significance of knowledge high quality and efficient prompting: “You’re only as good as the data you have, so you’ve got to make sure that’s clean. And then trying to direct the agent in the right format — because an agent wants to work 24/7.”
