NEW YORK, July 22, 2026, 09:06 EDT — Dell Technologies NYSE:DELL advanced on Wednesday after stronger-than-expected margins from a sector peer added to optimism around profit potential from AI-server offerings.
- Dell shares were at $414.24, rising 2.5% as of 09:01 EDT.
- Super Micro NASDAQ:SMCI anticipates fourth-quarter preliminary gross margins in the range of 15% to 17%.
- Dell reported an AI backlog of $51.3 billion, representing 85.5% of its yearly sales goal.
Dell stock climbed ahead of Wednesday’s opening bell following Super Micro’s unexpected margin increase. The move was prompted by its competitor, making the implications particularly noteworthy.
The investor takeaway is not about increased demand. As of May 1, Dell’s AI backlog stood at $51.3 billion. Rather, the latest data suggests improvements in server economics.
U.S. cash markets had not opened as of the dateline. Dell ended Tuesday at $404.15, rising 6.01%. Hewlett Packard Enterprise NYSE:HPE was also up in premarket action.
Super Micro projected revenue for the June quarter to be close to the lower range of $11 billion to $12.5 billion. The company forecast gross margin between 15% and 17%, up from a prior range of 8.2% to 8.4%. Fresh orders topped $60 billion, resulting in a record backlog.
The results are initial and have not been audited. Super Micro pointed to a positive customer and product combination. The company also noted that certain orders could face cancellation or postponement.
The most recent figures from Dell and Super Micro’s early update demonstrate the increased significance of margins.
| Metric | Dell, Q1 FY2027 | Super Micro, Q4 FY2026 preliminary |
|---|---|---|
| AI or new orders | $24.4 billion | Above $60 billion |
| Relevant revenue | $16.1 billion in AI server revenue | At the lower end of $11 billion-$12.5 billion total forecast |
| Backlog | $51.3 billion in AI backlog | Record backlog; specific figure not released |
| Profitability signal | 18.1% company non-GAAP gross margin; AI operating-income guidance mid-single-digit range | Gross margin between 15% and 17%; previous forecast at 8.2%-8.4% |
Dell recorded a Q1 AI order-to-bill ratio of 1.52. The backlog accounted for 85.5% of its $60 billion annual goal. Demand visibility remained strong.
In May, Dell vice chairman and chief operating officer Jeff Clarke outlined the scope: “We’ve booked $24.4 billion in AI orders and recognized $16.1 billion of AI server revenue.”
Dell’s primary challenge did not stem from demand. The company’s non-GAAP gross-margin rate for Q1 dropped by 350 basis points, reaching 18.1%. Executives attributed this chiefly to the AI-server product mix.
Profitability for AI servers held close to a mid-single-digit operating income goal. As a result, Super Micro’s margin shift is a more telling indicator than its reported orders.
The figures are not directly equivalent. Super Micro reported gross margin, while Dell referred to operating income from AI servers. Nevertheless, the latest update indicates that changes in customer mix could boost returns across the sector.
Dell’s larger infrastructure division has already demonstrated this impact. ISG operating margin climbed to 10.5%, a rise of 80 basis points. Revenue from AI servers grew by nearly nine times.
Dell’s premarket shares stayed 11.8% under its June 1 peak. Analysts set a median price target of $500, suggesting potential gains of about 21%. However, that buffer relies on margins staying intact.
Risks persist. Super Micro’s projections are subject to adjustment, and certain orders might not be confirmed. Dell continues to encounter memory supply limitations and margin pressures related to AI.
Super Micro is set to announce its final results on August 11. Dell is expected to release its next quarterly figures on September 3. These upcoming reports will provide a key test of the current margin expectations.
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