Dell at Citi’s 2026 Global TMT Conference: demand broadens

On September 10, 2026, Dell Technologies attended the Citi Global TMT Conference to discuss the continual growth in demand for its infrastructure products. Financial Officer David Kennedy highlighted the company's strong performance in AI servers, traditional servers, and storage, but cautioned that supply constraints could worsen in the upcoming year. The message from Dell was largely positive, with the company reporting record margins, a larger backlog, and a surge in long-term customer commitments.

Dell noted that demand for AI infrastructure is broadening across regions, customer segments, and verticals. In the second quarter, the company booked $6.1 billion in AI server orders, matching the total from the previous three quarters. The Infrastructure Solution Group's margins reached a record 15%, driven by scale and pricing discipline. Management raised its fiscal 2027 guidance by 70% from previous expectations.

Despite tight supply chains in DRAM, NAND, CPUs, and AI components, Dell expects the constraints to intensify next year. The company reported $6.1 billion in AI server bookings in Q2, which was equal to the total from the prior three quarters combined. Over 12 months, total AI bookings reached $13.2 billion. Traditional server growth was reported at 122% year-over-year, while storage revenue grew by 26% year-over-year.

Kennedy emphasized that sales growth outpaced what was reflected in the company's financial results, describing the demand as "faster than the P and L." He also pointed out that growth was widespread, with every geography experiencing triple-digit growth and gains across customer segments and verticals. Storage continued to be an important contributor, with the business adding $2.5 billion to the profit and loss statement this year and expecting a record storage quarter.

The company's storage business added $2.5 billion to the profit and loss statement this year and projected a record storage quarter. PowerStore, PowerScale, and ObjectScale have shown consecutive double-digit growth for 10, 5, and 4 quarters, respectively. Dell's storage portfolio allows for higher average selling prices through software and services, while supporting margin thresholds better than those of third-party products.

Dell's growth is driven by several concurrent demand sources, including strong AI server demand, a major refresh cycle in traditional servers, and a new wave of inferencing, security, and resiliency needs. AI server bookings are rising quickly among enterprise, sovereign, and neocloud customers. Traditional server demand is supported by modernization and higher density requirements, while inferencing workloads create a new layer of demand beyond the regular refresh cycle.

The company's enterprise AI customer base has grown to more than 6,500 customers, a 60% increase in the past six months, representing about 10% to 15% of the broader enterprise market. This still suggests room for further growth. Dell's AI backlog stands at $95 billion, with roughly an 80/20 to 90/10 split between customers ready for deployment and those still preparing their data centers.

Kennedy attributed Dell's success to operational flexibility, such as shifting wafer supply from consumer PCs to infrastructure products for the second half of the year. This strategic move allowed the company to reallocate supply across its portfolio when demand changes. Supply constraints are primarily affecting DRAM and NAND first, with CPUs becoming part of the constraint picture, and AI-related parts like optics, transceivers, and T-glass also being tight. Supply conditions are expected to worsen in 2026 compared to 2025.