Dell Technologies (DELL) Citi’s 2026 Global TMT Conference summary

Market outlook and demand trends

• Infrastructure demand is accelerating, driven by AI server GPU orders totaling $13.2 billion over 12 months, with enterprise segment growth outpacing others.

• Traditional server demand grew 122% in Q2, with triple-digit growth across all geographies and customer segments.

• Storage revenue increased 26% in Q2, with guidance for double-digit growth for the full year, reflecting early-stage enterprise adoption.

• Supply constraints, especially in DRAM, NAND, CPUs, and AI server components, are expected to persist and tighten into next year.

• Enterprises are increasingly seeking multi-year supply guarantees, leading to longer-term visibility and diversified customer engagement.

Financial performance and margin drivers

• ISG margins reached 15%, supported by operational scale and a shift to higher-margin storage and software offerings.

• Operating expenses have been reduced to 8% of revenue, the most efficient level in company history, down from 20% six years ago.

• Storage portfolio has delivered six consecutive quarters of demand growth, nearly doubling market growth rates.

• AI server growth is being absorbed by scale and storage tailwinds, maintaining mid-single-digit margins on multi-billion dollar deals.

• Share buybacks increased from $1.6 billion to $3.9 billion in 90 days, reflecting strong cash generation and shareholder returns.

Product and technology strategy

• Focus remains on expanding the storage portfolio and engineering labs to support next-generation AI server ecosystems.

• Project Lightning is in early testing with major customers, but not yet material to financials.

• Full rack and disaggregated architectures are seen as opportunities, with complexity and time-to-deployment as key differentiators.

• Fungibility in supply chain allows reallocation of resources, such as shifting wafer supply from consumer PCs to infrastructure.

• End-to-end product coverage across edge, compute, and storage positions the company to capture multi-year TAM expansion.