Ben Reitzes's questions to Dell Technologies (DELL) leadership • Q2 2026
Question
Ben Reitzes of Melius Research asked for specifics on why AI server margins are expected to improve, their potential magnitude, and whether an increased attach rate of other products is the primary driver.
Answer
Jeff Clarke, Vice Chairman and COO, outlined several reasons for the expected AI margin improvement. He noted that one-time Q2 costs for expediting materials will not recur. Furthermore, margins will benefit from value engineering, the scaling of the business, and an expanding enterprise customer base, which provides greater opportunities to attach higher-margin networking, storage, and services. He also stressed that an improved overall business mix, with a recovery in more profitable traditional servers and storage, will lift total ISG margins.