Shares of Dell Technologies experienced a remarkable surge of approximately 33% on Friday, marking the company’s most significant single-day increase following the release of its fiscal first quarter results for 2027, which concluded on May 1, 2026. This substantial rise not only benefitted Dell’s shareholders but also sparked interest in a range of stocks associated with artificial intelligence (AI) infrastructure, such as server manufacturers and enterprise software.
Dell reported an astonishing 88% year-over-year revenue increase, achieving a record $43.8 billion, the fastest growth since its return to public markets in 2018. This growth was fueled primarily by sales of AI-optimized servers, which skyrocketed by 757% to $16.1 billion. Notably, the company’s infrastructure solutions group, encompassing its data center hardware, saw a 181% growth to $29 billion, while traditional server and networking sectors also posted a 92% increase. Adjusted earnings per share rose by 214%.
In light of this performance, Dell management raised its full-year revenue forecast to between $165 billion and $169 billion and set a target for AI server revenue to reach $60 billion. Dell’s Vice Chairman and COO, Jeff Clarke, noted that the company’s demand pipeline indicates a steady rise rather than a slowdown.
Meanwhile, Hewlett Packard Enterprise (HPE), Dell’s primary competitor in the enterprise server domain, recorded a 12.64% surge without any new announcements, heading toward its fiscal second-quarter report set for Monday. HPE’s recent fiscal first-quarter report showed an 18% revenue increase to $9.3 billion, driven primarily by its networking business, bolstered by the acquisition of Juniper Networks. With revenue projections for the upcoming quarter ranging between $9.6 billion and $10 billion, HPE currently trades at a lower multiple than Dell due to a smaller AI server business segment.
ServiceNow, a prominent player in the software realm, also witnessed a 14.58% increase as its stock stabilized following a rough year marked by fears that AI advancements might diminish demand for enterprise software. Despite the recent uptick, ServiceNow’s stock is still around 40% below its 52-week high, following a noticeable drop in its market capitalization. However, the company reported a 22% increase in subscription revenue, showing that its AI suite, Now Assist, is proving to be a growth factor rather than a hindrance.
Overall, the significant increase in spending by major cloud providers on AI infrastructure, projected to exceed $700 billion in 2027, has begun to impact associated businesses positively. Dell and HPE are finding increased demand for their hardware, while software firms like ServiceNow are managing to leverage AI to thrive. Nevertheless, investors are cautioned about possible risks associated with chasing the recent market pops, as hardware companies typically operate on thinner margins and are subject to cyclical spending trends, while higher-quality software companies may maintain a valuation premium that poses its own set of challenges.
