Dell’s Monster Quarter Just Confirmed Micron’s Biggest Opportunity Is Not Just HBM

Dell Technologies reported record fiscal second-quarter revenue of $47 billion, marking a 58% increase from the previous year. Non-GAAP earnings per share reached $7.04, significantly surpassing Wall Street's estimate of $4.72 per share. The company raised its fiscal 2027 revenue forecast by $25 billion to $192 billion and increased its non-GAAP EPS outlook for the same period to $25.50.

Dell delivered $60.9 billion of AI-server orders, generated $16.4 billion of AI-server revenue, and accumulated a $95 billion backlog, up from $51.3 billion three months earlier. The Q2 results, including a 122% year-over-year increase in traditional server and networking revenue and a 26% year-over-year increase in storage revenue, underscore the strong demand for AI spending.

Dell's PowerEdge servers, along with AI-server backlog, indicate a robust demand for memory and storage components. Micron Technology, which supplies DDR5 server memory and data-center SSDs used by Dell's infrastructure, benefits from this trend. In its fiscal Q3, Micron generated $41.5 billion of revenue, with DRAM accounting for 76% and NAND contributing 24%.

The pricing for DRAM and NAND has surged, indicating a supply-constrained market, which benefits Micron. However, memory remains a cyclical industry, influenced by demand fluctuations. Dell's $95 billion backend backlog, though not equivalent to recognized revenue, reinforces the demand signal. Overall, Dell's Q2 results provide a compelling case for Micron investors, as the overall memory cycle gains strength, driven by broader server and storage demands.