Analyst(s): Futurum Research
Publication Date: December 1, 2025
Dell’s Q3 FY 2026 update underscores accelerating AI server momentum, expanding enterprise and sovereign demand, and continued strength in traditional infrastructure. The quarter also highlighted cost discipline and supply-chain agility amid rising memory component pricing.
What is Covered in this Article:
- Dell Technologies’ Q3 FY 2026 financial results
- AI servers: orders, backlog, deployments
- Supply and memory cost management strategy
- Traditional servers and storage product mix shifts
- Guidance and Final Thoughts
The News: Dell Technologies (NYSE: DELL) reported Q3 FY 2026 results. Revenue was $27.0 billion, up 11% year on year (YoY), versus Wall Street consensus of $27.2 billion. Infrastructure Solutions Group (ISG) revenue was $14.1 billion, up 24% YoY, with Servers and Networking at $10.1 billion (up 37% YoY) and Storage at $4.0 billion (down 1% YoY); Client Solutions Group (CSG) revenue was $12.5 billion (up 3% YoY) with Commercial at $10.6 billion (up 5% YoY) and Consumer at $1.9 billion (down 7% YoY). Non-GAAP operating income was $2.5 billion (9.3% of revenue), up 11% YoY. Non-GAAP net income was $1.8 billion (+11% YoY) and non-GAAP diluted EPS was $2.59, up 17% YoY.
“In the third quarter we delivered record Q3 revenue of $27 billion, record Q3 profitability, strong cash generation and above-trend capital return of $1.6 billion,” said David Kennedy, chief financial officer, Dell Technologies. “FY26 will be another record year, and we’re raising our AI shipment guidance to roughly $25 billion, up over 150% year over year, and revenue guidance to $111.7 billion, up 17%.”
Dell Technologies Q3 FY 2026: AI Orders, Backlog, and Outlook Rise
Analyst Take: Dell’s Q3 FY 2026 results highlight sustained AI infrastructure momentum paired with pragmatic supply-chain execution. AI server orders of $12.3 billion, shipments of $5.6 billion, and a record $18.4 billion backlog point to durable demand from neocloud, sovereign, and enterprise buyers. Traditional x86 demand improved sequentially across regions, while the Dell-IP storage portfolio maintained a healthy mix with All-Flash arrays. With memory costs rising across DRAM, NAND, and HDD, Dell’s supply-first posture and direct model remain central to sustaining margin stability and delivery cadence.
AI Server Momentum and Rack-Scale Differentiation
AI demand accelerated with $12.3 billion in quarterly AI server orders, bringing year-to-date orders to $30.0 billion and shipments to $15.6 billion. Dell emphasized rack-scale engineering and time-to-value, citing AI racks becoming operational within 24–36 hours and uptimes exceeding 99%. The backlog ended at a record $18.4 billion, and the five-quarter pipeline remains multiples of backlog, broadening across neoclouds, sovereigns, and enterprises. Mix shifted toward GB300 as expected, reinforcing alignment to next-gen accelerators and power-density roadmaps. Dell’s services, financing, and global support provide incremental attach opportunities as clusters scale. The strategic takeaway is that rack-level integration and deployment speed are differentiators as AI factories expand.
Supply Chain and Memory Cost Management
Management flagged atypically rapid cost increases across DRAM, NAND, HDD, and leading-edge nodes, with a supply-first stance to secure parts and optimize mix. Dell plans to minimize customer impact via configuration flexibility, availability management, and repricing where necessary through its direct model. The company noted the Q4 cost outlook is largely unchanged sequentially, with continued operating income rate improvement expected in ISG. Prior one-time costs tied to expedites and supply reconfiguration have abated, while broader customer mix is aiding AI margin stability in the mid-single-digit range. These levers aim to balance growth with profitability as component inflation persists. The implication is that execution on supply and mix will be the primary driver of earnings resilience.
Traditional Servers and Storage Trajectory
Traditional x86 server demand improved double digits with sequential acceleration in EMEA and North America, reflecting consolidation and performance-centric configurations. Customers are adopting denser compute with higher DRAM and storage footprints, with PC refresh and AI-related modernization contributing to broader IT upgrades. In storage, Dell-IP platforms such as PowerStore, PowerMax, ObjectScale, and PowerFlex posted double-digit demand growth, with PowerStore growing for seven consecutive quarters. The portfolio mix shift and margin improvement in storage supported ISG’s operating income rate, advancing to 12.4% (up 360 bps sequentially). Taken together, these trends suggest steady infrastructure pull-through alongside AI builds.
Guidance and Final Thoughts
For Q4 FY 2026, Dell guided revenue to $31.0–$32.0 billion, with ISG up mid-60s YoY and CSG up low-to-mid single digits, and expects approximately $9.4 billion of AI server shipments. Full-year AI server shipments are now expected to be roughly $25.0 billion (up over 150% YoY), with non-GAAP EPS guided to $9.92 at the midpoint (up 22% YoY). Operating expenses are expected to be flat sequentially, with operating income up roughly 21%, indicating further ISG margin improvement. The setup for FY 2027 centers on execution against backlog, pipeline conversion, and continued cost/mix optimization amid tight memory supply. For enterprise buyers, plan for higher-capacity, higher-TDP racks and accelerated deployment cycles as power densities trend toward 500 kilowatts per rack and beyond. The practical takeaway is to align AI and traditional infrastructure roadmaps to Dell’s rack-scale capabilities and delivery windows.
See the full press release on Dell Technologies’ Q3 FY 2026 financial results on the company website.
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Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of Futurum as a whole.
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