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As recently as a few years ago, Dell appeared to be a name destined for the business history books. The stock lost nearly a third of its value in 2022, and it was hard to see the once iconic PC-maker\u2019s place in a post-PC world. Then something extraordinary happened. In the span of two years, Dell quietly built a $25 billion AI infrastructure business from scratch, posted total company record revenues of $113.5 billion, and it is now guiding Wall Street toward $50 billion in AI server sales next year alone.<\/p>\n
Recently Fortune visited Dell\u2019s CFO in New York to find out more about how the company pulled off something almost no company of its size has managed to do: Reinvent itself in real time. David Kennedy is a 27-year veteran of Dell, and was confirmed as CFO in November 2025 after serving as interim. In a conference room overlooking the chaos of 34th Street, Kennedy walks me through the recent record performance posted by the Round Rock, Texas-based giant (No. 44 on the Fortune 500).<\/p>\n
\u201cIf you take the 12 months we\u2019ve just finished, we did $34 billion in AI-optimized server orders in Q4, which tapped us up to $64 billion for the full year, and we exited the year with $43 billion in backlog,\u201d Kennedy said. Fourth-quarter AI server revenue alone surged 342% to $9 billion.\u00a0\u201cWhat\u2019s super exciting is our next five-quarter pipeline of opportunities has never been higher.\u201d <\/p>\n
For fiscal 2027, Dell has guided for $50 billion in AI-optimized server revenue, representing 103% growth year-over-year. Kennedy attributed demand to global interest across neo-clouds, sovereign AI deployments, and Dell\u2019s enterprise base. \u201cThe fear of being left behind,\u201d he said, \u201cis becoming\u00a0more powerful.\u201d<\/p>\n
Bank of America\u00a0analysts recently raised their forecasts for Dell\u2019s AI-servers, increasing their estimate for the current quarter to about $15 billion and lifting their full-year projection to roughly $60 billion, citing stronger-than-expected demand. Morningstar also increased its fair value estimate, noting that sustained AI demand will be key to long-term upside. <\/p>\n
If there\u2019s a cloud over the otherwise sunny outlook, it\u2019s supply. Kennedy was direct: there simply aren\u2019t enough components in the ecosystem to fully satisfy AI infrastructure demand. \u201cI\u2019d love more supply still,\u201d he said.\u00a0<\/p>\n
But Kennedy argues Dell\u2019s multi-decade supplier relationships give it an edge over competitors in securing what\u2019s available. And unlike some peers, Dell provided a full-year fiscal 2027 guidance \u2014 a signal, Kennedy said, that the company has supply commitments to support it.\u200b<\/p>\n
On the question of AI server profitability, a topic that has made some investors nervous, Kennedy was unfazed. Dell targets mid-single-digit operating margins on its AI infrastructure business, a figure it has maintained consistently. \u201cMid-single digits on $50 billion,\u201d he said, \u201cis a lot of dollars.\u201d<\/p>\n
At the core of Dell\u2019s strategy is what Kennedy calls an \u201cAI factory,\u201d which is an end-to-end infrastructure stack built around data. That includes GPU-powered servers developed with Nvidia, a large-scale storage business, and networking systems.<\/p>\n
\u201cIt\u2019s all about data,\u201d Kennedy said. \u201cHow do you manage it, store it, use it, deploy it?\u201d He said Dell\u2019s ability to build, deploy, and service systems at 99.9%-plus uptime has helped differentiate it and strengthen customer relationships.<\/p>\n
The company now has more than 4,000 enterprise AI factories deployed with customers, including more than 750 added in the fourth quarter alone.<\/p>\n
Inside the finance function: Agentic AI<\/p>\n
Dell has spent the past two years modernizing and standardizing its systems to prepare for broader AI adoption. That foundation is now enabling the company to scale agentic AI internally, Kennedy said.<\/p>\n
The OpEx discipline has come with a workforce reduction. Dell\u2019s total headcount fell roughly 10%, or about 11,000 employees, in fiscal 2026, according to its\u00a010-K filing, which is the third consecutive year of comparable declines. The company has spent $569 million in severance in the most recent fiscal year. Dell said in its 10-K\u00a0that fiscal 2026 headcount reductions stemmed from employee reorganizations, limits on external hiring, and other cost-alignment measures tied to its business modernization efforts. \u201cDespite these difficult decisions, we continue focused efforts to empower our employees and attract, develop, and retain talent,\u201d the company stated.<\/p>\n
Regarding agentic AI, Kennedy has a focus on the finance function. \u201cI\u2019ve started to deploy agents to do reconciliations, do accounting journal entries,\u201d he said. \u201cWe\u2019ve launched digital twins in our supply chain and services organizations. We have our own internal sales chat CRM model, which has handed back multiple hours per week to our sales force.\u201d<\/p>\n
Kennedy has gone further personally \u2014 incubating a team of data scientists within his finance function and building proprietary agents under Dell\u2019s internal governance framework. He uses AI to streamline his calendar, automate emails, and drill down on forecast data by country and segment.<\/p>\n
His view on workforce impact is that AI redistributes effort toward higher-value work. \u201cThe accountability level is still there,\u201d he said, pointing to relationships with auditors and regulators. \u201cAll they\u2019re doing is getting help in getting faster decisions, quicker.\u201d<\/p>\n
He also emphasized the importance of data quality and effective prompting: \u201cYou\u2019re only as good as the data you have, so you\u2019ve got to make sure that\u2019s clean. And then trying to direct the agent in the right format \u2014 because an agent wants to work 24\/7.\u201d<\/p>\n
#Dells #CFO #agents #run #financeand #helped #business #billion<\/p>\n","protected":false},"excerpt":{"rendered":"
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