Dell Technologies (NYSE:DELL) posted a mixed earnings report, with revenue coming in at $23.9 billion for the fourth quarterup 7% year over year but missing the $24.6 billion Wall Street estimate. On the bright side, adjusted earnings per share landed at $2.68, beating analyst expectations of $2.52. The Infrastructure Solutions Group continued its AI-driven surge, growing 22% to $11.4 billion, while the Client Solutions Group saw a 5% uptick, driven by commercial sales. Consumer PC demand, however, remained sluggish.

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Dell's AI momentum isn't slowing down. The company generated $10 billion in AI server sales in fiscal 2025 and is targeting $15 billion this year, with a $4.1 billion backlog as of January. It continues to supply high-demand Nvidia-based servers to major players like Elon Musk's xAI and cloud provider Coreweave. Still, guidance raised some concernsDell expects fiscal 2026 revenue between $101 billion and $105 billion, slightly trailing the $103.4 billion consensus estimate. First-quarter revenue projections also came in lighter than expected, at $22.5 billion to $23.5 billion, missing the $23.6 billion analyst target.

The company is returning more cash to investors, boosting its annual dividend by 18% to $2.10 per share. But governance issues surfaced after Dell disclosed accounting misstatements related to supplier credits, leading to financial restatements. While management insists the impact is not material, it adds an element of uncertainty. Dell shares dropped nearly 7% at 1.27pm, as investors weighed AI-driven growth against short-term revenue softness and corporate oversight concerns. Morgan Stanley's Erik Woodring remains bullish on Dell's AI trajectory but expects near-term headwinds due to supply chain constraints, with stronger momentum likely later in the year.