Dell's PC shipments fell 25% and AI-server orders hit $60.9 billion; the stock is up 356% this year
Dell's PC shipments fell 25% in the third quarter while Wall Street crowned it an AI winner. The server business it pivoted to runs at mid-single-digit operating margins, and the holiday quarter is the test.
Vincent Jiang · 3 min read
A spring call, priced in the third quarter
In the spring, Dell−0.96% — Dell, down 0.96 percent today chief financial officer David Kennedy made the call: consumer PC units were heading down 18% to 20%, so Dell would lean into AI servers 1. The third quarter prices that decision. Preliminary tracker figures from market researcher IDC, published October 8, put Dell's PC shipments at 7.6 million units, down 25.0% in a worldwide market that fell 20.1% to 62.7 million, a second straight decline 25. HP+3.63% — HP, up 3.63 percent today fell harder at 30.9%, Lenovo 22.6%; Apple+0.38% — Apple, up 0.38 percent today lost only 11.3% and gained share 2.
The memory crunch emptied the PC shelf
Prices did the damage. Morgan Stanley−1.59% — Morgan Stanley, down 1.59 percent today analyst Erik Woodring estimates third-quarter global average selling prices above $1,200, nearly 40% above early 2025 1. The cause runs through the AI boom itself: Deloitte says the cost of AI server DRAM, the memory in every computer, roughly doubled in the first quarter of 2026 and may quadruple for the full year, a squeeze it does not expect to ease until 2029 1.
Dell's PC shipments fell 25%, worse than a market down 20%
Data
| Value | |
|---|---|
| ASUS | -8.6% |
| Apple | -11.3% |
| Worldwide | -20.1% |
| Lenovo | -22.6% |
| Dell | -25% |
| HP | -30.9% |
The offset doubles revenue and thins margin
The same boom pays Dell's bills. The quarter reported on September 1 set records: revenue of $47 billion, up 58%; AI server revenue of $16.4 billion; $60.9 billion of fresh AI server orders; a $95 billion backlog 6. Quarterly revenue has doubled in six quarters 9. What survives to profit is thinner. Kennedy's stated target for the AI server business is a mid-single-digit operating margin, and the infrastructure segment's margin fell to 10.5% from 14.8% as the AI mix grew 7. Across the same rack, assembler Dell keeps roughly eight cents of each sales dollar, power and cooling supplier Vertiv−1.45% — Vertiv, down 1.45 percent today about 18, chipmaker Broadcom+0.60% — Broadcom, up 0.60 percent today more than 40 4.
AI servers doubled Dell's quarterly revenue in six quarters
Data
| Quarterly revenue | |
|---|---|
| Q1 '24 | $22.24B |
| Q2 '24 | $25.03B |
| Q3 '24 | $24.37B |
| Q4 '24 | $23.93B |
| Q1 '25 | $23.38B |
| Q2 '25 | $29.78B |
| Q3 '25 | $27.01B |
| Q4 '25 | $33.38B |
| Q1 '26 | $43.84B |
| Q2 '26 | $46.97B |
Wall Street bought the server story anyway
On October 8, the day IDC published, tech analyst Dan Ives added Dell to his AI 30 list at Yorkville Ives, dropping Oracle+4.77% — Oracle, up 4.77 percent today and Pegasystems 3. The stock is up 356% this year 3. The Street's consensus is a Moderate Buy with an average target of $598.20, barely 4% above the market 8. Woodring rates Dell equal weight at $499 and expects it to hold up better than HP and Acer, which lean cheaper 1.
The holiday quarter keeps score
Woodring forecasts fourth-quarter PC shipments down 28% and calendar 2027 down another 11%, seven points below consensus 1. Kennedy has guided to a sequential improvement in the infrastructure margin 7. The next earnings print, set against IDC's fourth-quarter tracker, shows whether repricing outruns memory inflation while the PC business shrinks into the holidays. The memory crunch that emptied Dell's PC shelves is the same one filling its backlog, and the margin line decides what that backlog is worth.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
