Dell Technologies reported record-breaking second-quarter revenue for fiscal 2026, largely driven by surging demand for AI-optimized servers, while executives also signaled that the PC refresh driven by the Windows 10 end of life would stretch out for some time.
The company’s Q2 revenue was higher by 19% on the year at $29.8 billion. Revenue for its Infrastructure Solutions Group (ISG) was $16.8 billion, a 44% year-over-year gain. This came from a 69% increase in Servers and Networking, which amounted to $12.9 billion.
In the first half of the year, the company shipped $10 billion worth of AI solutions, higher than its shipments for full-year fiscal 2025. Based on this momentum, Dell raised its full-year AI server shipment guidance to $20 billion.
The Client Solutions Group (CSG), which includes PCs and displays, generated $12.5 billion in revenue, up 1%, with commercial clients higher by 2% at $10.8 billion, while consumer sales fell 7% to $1.7 billion.
“In CSG, we saw momentum continue, although not at the pace we expected,” said COO Jeff Clarke during the call. He added that amid a deflationary environment, “We expect moderate growth as the PC refresh continues, driven by an aging installed base and the Windows 10 end of life.”
Microsoft will discontinue support for the operating system on Oct. 14, leading to an influx of devices. Last month, Ingram Micro also cited Windows and AI for the higher device refresh pace.
Despite the quickly approaching end-of-life date, Clarke said he expects PC refreshes to continue into calendar 2026. About half of the hundreds of millions of PCs have been upgraded to Windows 11 capability so far, “which tells you about half of the installed base is not. That’s what’s in front of us,” and it’s “highly unlikely the other half is going to be done” by Oct. 14, and will likely extend into next year.
“How much? I don’t know. But it’s why we believe the second half of the market continues to be a good PC market.”
