SpaceX and CoreWeave Helped Turn Dell Into an AI Rocket. Earnings Could Bring It Back to Earth

Dell Technologies reports fiscal second-quarter results on September 1, 2026, after shares surged 247.32% year to date to $433.19, driven by AI infrastructure spending from customers SpaceX and CoreWeave. Analysts expect revenue of $44.5 billion (up 49% year over year) and non-GAAP EPS of $4.80 (up 107%), but the stock has cooled 9.72% in the past week, and the key question is whether good numbers will be enough after such a large rally.

Dell Technologies NYSE:DELL https://247wallst.com/companies/dell/ | DELL Price Prediction https://247wallst.com/companies/dell/price-prediction reports fiscal second-quarter results after the close on Tuesday, September 1, 2026, and the setup is unusual. Shares have climbed 247.32% year to date, powered by a story investors know by heart: SpaceX NASDAQ:SPCX https://247wallst.com/companies/SPCX/ and CoreWeave NASDAQ:CRWV https://247wallst.com/companies/crwv/ , two of Dell’s largest customers, are spending heavily on AI infrastructure, and Dell is the hardware supplier catching most of it. The stock started the year near $124.72 and closed Monday at $433.19, well ahead of most large-cap peers. With backlog and known customer spending making solid numbers likely, the relevant question is whether good numbers are good enough after a move of this size. Four things decide how the report is received. How quickly the AI backlog converts into recognized revenue, whether new orders keep outpacing conversion, what margins look like as the mix shifts toward a handful of very large buyers, and what management guides to for the balance of the year. A Rally That Priced In the Rocket Dell entered the year trading like a hardware company. It exits August up 235.33% over the trailing twelve months and 821.53% over five years, closer to a growth multiple than an infrastructure one. Analysts have followed the move higher. The consensus price target is $508.78, with 19 buy ratings, 8 holds, and no sells. Forward earnings trade around 24x, defensible if AI revenue keeps compounding at current rates. Recent price action is less exuberant. Shares are down 9.72% in the past week and roughly flat over the past month, so some of the pre-earnings enthusiasm has cooled. Recent insider activity is net selling. Polymarket assigns a 0.905 probability that Dell beats consensus non-GAAP EPS this quarter. That reflects confidence in a beat itself, with the stock’s reaction to one still an open question. What the Street Is Modeling Company guidance is the cleanest proxy for consensus because Dell raised its outlook after the prior quarter, and sell-side estimates largely aligned with it. | Metric | Q2 Midpoint | YoY Growth | Full Year | YoY Growth | |---|---|---|---|---| | Revenue | $44.5B | 49% | $167.0B | 47% | | Non-GAAP EPS | $4.80 | 107% | $17.90 | 74% | | AI-optimized servers | $15.5B | n/a | ~$60B | 144% | Those growth rates would be extraordinary for any hardware business. They are also what is already assumed at these levels. Last quarter set an unusually high bar for comparison. Q1 FY27 revenue came in at $43.84 billion, beating consensus by 22.58%, and non-GAAP EPS of $4.86 landed 63.99% above the estimate. A quarter that merely matches guidance will look small by comparison, even if the absolute figures are enormous. That is the structural problem with reporting after a quarter this large. Backlog Conversion and the Order Cadence Last quarter, Dell booked $24.4 billion in AI orders and recognized $16.1 billion in AI server revenue. It exited the period with a $51.3 billion AI backlog. Two numbers matter more than the headline. First, how much of that backlog can Dell convert into recognized revenue, given what management described as memory-driven supply constraints? Second, whether new orders keep pace, because a contracting backlog would signal peak intake is behind the company. Management said in May that “demand continues to exceed supply, with memory as the primary constraint”, and that the pipeline was multiples of backlog. If new orders slow, or if the backlog contracts, the AI rocket narrative becomes harder to defend at these multiples. Customer capital spending from SpaceX and CoreWeave supports the demand side, but published spending plans do not match booked orders, and this report will make that distinction concrete. The broader question is who else feeds the buildout beyond the chipmakers, something we mapped across power, cooling, and networking suppliers in a free report on seven AI infrastructure stocks that aren’t chipmakers https://247wallst.com/pages/ai-power-seven-offer-d905ec99.html . Margin Math When Customers Get Bigger Gross margin was 17.8% last quarter, down from 21.1% a year earlier, with the compression driven almost entirely by AI server mix. Management said AI server profitability sits within its mid-single-digit operating income rate target. Selling servers to a small group of enormous customers with real negotiating power is a different business from selling broadly to enterprise. Those buyers can extract price, dictate terms, and shift volume elsewhere. That matters for the multiple. A business with rapid revenue growth and mid-single-digit operating margins in its fastest-growing segment does not deserve the same multiple as one that is turning growth into operating leverage. The counter-argument is storage and traditional server strength. ISG operating margin expanded to 10.5% last quarter, and traditional servers and networking revenue grew 92% year over year. If that mix holds up while AI scales, the margin story becomes less binary. Whether an In-Line Quarter Can Hold This Multiple My read is that an in-line quarter, meaning results at or near the midpoint of guidance, is unlikely to sustain the stock at these levels. The rally has already priced a beat and a raise. What would sustain it is a combination: backlog conversion in line with guidance, new order growth that keeps the backlog expanding, and stabilization in gross margin outside of AI mix effects. Absent that trio, the multiple looks stretched. A guide-up on full-year AI server revenue, above the current $60 billion midpoint, would matter more than any beat on the current quarter. That is the number anchoring FY27 and the FY28 setup. You should watch the guidance line and the backlog line, in that order. The rest of the report will read as confirmation or as the moment the market decides the rocket needed a rest. Contact email protected for any questions or corrections.