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NewsMacro

Dell Technologies in focus as UBS lifts estimates on AI server backlog conversion ahead of earnings

Improving conversion of Dell Technologies' (DELL) AI server backlog into fiscal year 2027 revenue is the operational driver behind a fresh estimate revision from UBS analyst David Vogt, who raised his second fiscal quarter revenue and EPS projections by approximately 4% ahead of the company's upcoming earnings report. Vogt now models $46.0 billion in quarterly revenue and $4.97 in EPS, clearing consensus at $45.1 billion and $4.90. Management's guidance on fiscal year 2027 AI server revenue is expected to be the primary catalyst when results are released.

By Renata OstrowskiNewsroomSeptember 1, 20262 min read
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Key takeaways

  • UBS analyst David Vogt raised his second fiscal quarter revenue and EPS estimates for Dell Technologies by roughly 4%, now modeling $46.0 billion in revenue and $4.97 EPS, above consensus of $45.1 billion and $4.90.
  • Vogt lifted his fiscal year 2027 AI server revenue forecast by about 10% to $66.9 billion, but that still trails the market's reported expectation of $70 billion to $75 billion.
  • Vogt maintains a neutral rating on Dell, citing limited gross margin expansion as a factor that may cap valuation growth.
  • For the second fiscal quarter, Vogt projects 17.1% gross margins, 9.3% operating margins, and $16 billion in AI server revenue.
  • Vogt's full-year fiscal 2027 estimates are $177.8 billion in revenue and $19.41 diluted EPS, above consensus of $174.8 billion and $19.03.

Improving conversion of Dell Technologies' (DELL) AI server backlog into fiscal year 2027 revenue is the operational driver behind a fresh estimate revision from UBS analyst David Vogt, who raised his second fiscal quarter revenue and EPS projections by approximately 4% ahead of the company's upcoming earnings report. Vogt now models $46.0 billion in quarterly revenue and $4.97 in EPS, clearing consensus at $45.1 billion and $4.90. Management's guidance on fiscal year 2027 AI server revenue is expected to be the primary catalyst when results are released.

The numbers

For the second fiscal quarter, Vogt projects gross margins of 17.1%, operating margins of 9.3%, and AI server revenue of $16 billion. On the full-year view, his fiscal year 2027 revenue estimate sits at $177.8 billion against consensus of $174.8 billion, with diluted EPS of $19.41 versus the street's $19.03. The firm also raised its fiscal year 2027 AI server revenue forecast by roughly 10% to $66.9 billion and lifted fiscal year 2028 estimates, anticipating demand to hold through the first half of that year. The gap between Vogt's AI server figure and what the market reportedly expects, a range of $70 billion to $75 billion, is the number to watch when management speaks.

What the setup carries

Dell's ability to pass increased component costs through higher average selling prices is central to the bull thesis, and Vogt's revised estimates reflect stronger general-purpose server unit demand alongside the backlog conversion dynamic. The constraint is margin. Vogt holds a neutral rating, citing limited potential for gross margin expansion as a factor that may cap valuation growth regardless of how the order book develops. At 17.1% projected gross margins for the quarter, the setup already prices in a degree of pricing power; whether that holds as component costs move is a question the tape has not fully resolved, and it is the part of the story consensus tends to underweight.

What to watch

The read-through that matters is fiscal year 2027 AI server revenue guidance from management. Vogt's model sits at $66.9 billion. The market's reported expectation runs between $70 billion and $75 billion. Where management places that number, and how it characterizes the backlog conversion pace into fiscal year 2028, is what the tape will price on.

Related reading

About this story

Filed by the newsroom of MarketPR on September 1, 2026. Source: MarketPR newsroom. Indicative figures are not investment advice.

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Frequently asked

Why did UBS raise its estimates on Dell Technologies?

UBS analyst David Vogt cited improving conversion of Dell's AI server backlog into fiscal year 2027 revenue, along with stronger general-purpose server unit demand, as the operational drivers behind the revision.

What is the key number to watch when Dell reports earnings?

Management's guidance on fiscal year 2027 AI server revenue is the primary catalyst; Vogt models $66.9 billion while the market reportedly expects $70 billion to $75 billion.

Why does Vogt hold a neutral rating despite raising estimates?

He cites limited potential for gross margin expansion as a factor that may cap valuation growth regardless of how the order book develops.

What is central to the bull thesis on Dell?

Dell's ability to pass increased component costs through higher average selling prices is central to the bull thesis, though whether that pricing power holds as component costs move remains unresolved.