Just a few years ago, Dell seemed like a name destined for the business history books. The stock lost nearly a third of its value in 2022, making it difficult to see where the once-iconic PC maker would fit in the post-PC world. Then something unusual happened. Dell quietly built a $25 billion AI infrastructure business from scratch in two years, posted a company-wide record in revenue of $113.5 billion, and is now leading Wall Street to $50 billion in AI server sales next year alone.
recently luck visited Dell’s CFO in New York to learn more about how the company was able to do something few companies of its size have been able to do: reinvent itself in real time. David Kennedy is a 27-year Dell veteran who was confirmed as CFO in November 2025 after an interim role. In a conference room overlooking the chaos of 34th Street, Kennedy described to me the recent record-setting performance posted by a major company based in Round Rock, Texas (No. 44 on the Fortune 500).
“Considering the just completed 12 months, we had $34 billion in orders for AI-optimized servers in the fourth quarter, up to $64 billion for the full year, and ended the year with $43 billion in backlogs,” Kennedy said. AI server revenue alone increased 342% to $9 billion in the fourth quarter. “What’s really exciting is that we have more opportunities than ever in the pipeline for the next five quarters.”
Dell plans to generate $50 billion in AI-optimized server revenue in 2027. This represents a 103% year-over-year growth. Kennedy attributes the demand to neocloud, sovereign AI adoption, and global interest across Dell’s enterprise base. “There is a growing fear of being left behind,” he says.
Analysts at Bank of America recently raised their expectations for Dell’s AI servers, raising their expectations for the current quarter to about $15 billion and the full year to about $60 billion, citing better-than-expected demand. Morningstar also raised its fair value estimate, noting that sustained AI demand will be key to the long-term upside.
If there’s a cloud in a sunny outlook, it’s supply. Kennedy frankly stated that there aren’t enough components in the ecosystem to fully meet the demand for AI infrastructure. “I would like to see more supply,” he said.
But Kennedy argues that Dell’s decades-long relationships with suppliers give it an advantage over competitors in securing availability. Also, unlike some of its peers, Dell provided guidance for the full fiscal year 2027. This is a sign that the company has supply commitments to support that, Kennedy said.
Kennedy was unfazed by the question of AI server profitability, which has worried some investors. Dell is targeting mid-single-digit operating margins for its AI Infrastructure business, and has maintained this consistently. “$50 billion, mid-single digits, is a huge amount,” he said.
At the core of Dell’s strategy is what Kennedy calls the “AI Factory,” an end-to-end infrastructure stack built around data. This includes GPU-powered servers and network systems developed with large-scale storage business Nvidia.
“It’s all about data,” Kennedy said. “How do you manage it, store it, use it and deploy it?” He said Dell’s ability to build, deploy and service systems with over 99.9% uptime helps differentiate the company and strengthen its customer relationships.
The company currently has more than 4,000 enterprise AI factories deployed with customers, including more than 750 added in the fourth quarter alone.
Inside the finance function: Agentic AI
Dell has spent the past two years modernizing and standardizing its systems to prepare for widespread adoption of AI. This foundation allows the company to scale agent AI in-house, Kennedy said.
OpEx discipline involves attrition. Dell’s 10-K filing shows its total workforce for fiscal year 2026 is down about 10%, or about 11,000 people, the third consecutive year of similar declines. The company spent $569 million in severance benefits in its most recent fiscal year. Dell said in its 10-K filing that the workforce reductions in fiscal 2026 are due to workforce restructuring, limited external hiring, and other cost adjustment measures related to business modernization efforts. “Despite these difficult decisions, we remain focused on empowering our employees and attracting, developing and retaining talent,” the company said in a statement.
When it comes to agentic AI, Kennedy focuses on finance functions. “We started putting in agents to do reconciliations and accounting entries,” he said. “We’ve introduced a digital twin to our supply chain and service organization. We have a unique internal sales chat CRM model that gives us back several hours a week to our sales force.”
Kennedy is personally going further, growing a team of data scientists within the finance department and building its own agents under Dell’s internal governance framework. He uses AI to streamline calendars, automate emails, and drill down into predictive data by country and segment.
His view on the impact on the workforce is that AI will reallocate effort to higher-value work. “There is still a level of accountability,” he said, pointing to relationships with auditors and regulators. “All they’re doing is getting help to make faster decisions.”
He also emphasized the importance of data quality and effective prompts. “The quality of your data is only as good as the data you have, so you have to make sure it’s clean, and you try to instruct your agents in the right format, because they want to work 24/7.”
