Dell Technologies’ 1Q FY26 scorecard shows the AI boom moving from promise to purchase orders. Revenue of $23.4 bln edged past estimates, and management booked a record $12.1 bln of AI-server orders, swelling backlog to $14.4 bln.  That demand allowed Dell to raise its full-year adjusted-EPS target to $9.40 (from $9.30) while leaving its $101-105 bln revenue outlook intact.  Still, the mix shift toward expensive, lower-margin AI rigs clipped profitability—non-GAAP EPS was $1.55, shy of the $1.69 consensus—but investors looked through the miss, sending the stock up ~10 % after hours.

• Infrastructure Solutions Group sales jumped 12 % Y/Y to $10.3 bln, buoyed by AI-optimized PowerEdge servers; Client Solutions (PCs) grew 5 % to $12.5 bln, hinting at an early commercial refresh cycle.
• Dell guided 2Q revenue to $28.5-29.5 bln and EPS to $2.25, both ahead of Street models, implying sequential acceleration as AI server shipments ramp from backlog.
• Management acknowledged that “high build costs and stiff competition” are pressuring gross margin but sees leverage improving as volumes scale and component pricing eases later this year.
• The company kept tariff-risk language unchanged, noting it has flexibility to shift manufacturing footprints if Washington-Beijing tensions intensify.
• Capital returns stay aggressive: Dell already boosted its dividend 18 % in February and still has $10 bln left on its buyback authorization.

Bottom line: Dell’s AI engine is gaining thrust even as near-term margins sputter.  With shares now back above $120, the market is discounting continued order conversion and a steadier cost curve; if backlog-to-shipment conversion proves smooth and PC demand stays positive, the stock could push toward the mid-$130s where it would trade ~14× the new EPS guide.  A hiccup in AI server profitability—or fresh tariff shocks—would likely cap the move near current highs while investors wait for clearer margin visibility.