For the quarter ended 2026-05-01, Dell reported $43,842M of revenue against $23,378M a year earlier — +87.5%. In the same quarter its gross margin was 17.75%, the lowest point in the fourteen quarters this site holds.
Both facts are the AI-server business. Dell is selling far more machines and keeping less of each dollar, and the two moved together.
Three years of first quarters
Every figure is from our stored Dell data. Dell's fiscal year ends in late January, so these are its first quarters — all three compared against the same quarter a year earlier, on period ends rather than fiscal labels:
| quarter ended | revenue | revenue growth | FCF margin | gross margin | Rule of 40 |
|---|---|---|---|---|---|
| 2024-05-03 | $22,244M | +6.32% | 2.01% | 21.81% | 8.33 |
| 2025-05-02 | $23,378M | +5.10% | 9.53% | 21.12% | 14.63 |
| 2026-05-01 | $43,842M | +87.54% | 7.11% | 17.75% | 94.65 |
The score went from 8 to 95 in two years. Gross margin went down at every step, and free-cash-flow margin is lower in the 95 quarter than in the 15 quarter. Essentially all of the move is the growth term.
What the score cannot see
That number is one of the highest Rule of 40 scores on this site — not that a reader could discover that here, because nothing ranks stocks by it. One comparison shows what it is not measuring:
| quarter ended | Rule of 40 | gross margin |
|---|---|---|
| DELL 2026-05-01 | 94.65 | 17.75% |
| AVGO 2026-04-30 | 94.14 | 69.48% |
Half a point apart — 0.51, though rounded to whole numbers the page shows 95 and 94 — on businesses that keep 17.75 cents and 69.48 cents of each revenue dollar. The Rule of 40 is revenue growth plus free-cash-flow margin. Neither term contains gross margin, so a company that sells hardware at a fifth of a software company's margin can score the same, and does.
Our own explainer says as much in one clause: the rule "was designed for software companies with 70-80%+ gross margins," and "applying it to hardware companies, banks, or retailers is meaningless." It then gives banks and lenders their own section, where a negative score is explained as a category error rather than a bad quarter. Hardware gets the clause and no section — so the caveat exists and never reaches the page a reader lands on.
Dell is not the only one. Sweeping the latest quarter of every company here for a score above 40 on a gross margin below 35%:
| ticker | quarter ended | score | gross margin |
|---|---|---|---|
| DELL | 2026-05-01 | 94.6 | 17.75% |
| AMCR | 2026-03-31 | 80.6 | 20.12% |
| CVX | 2026-06-30 | 78.4 | 32.34% |
| CVNA | 2026-03-31 | 60.7 | 19.76% |
| SMCI | 2026-03-31 | 57.3 | 9.95% |
Five names, none of them software, all of them scoring as though they were. Super Micro's score is nearly six times its gross margin — 57.3 against 9.95% — which is the whole argument in one row: the number the site sorts by is largest exactly where the business keeps least.
What to watch
Whether the margin stabilises. 17.75% is the floor of the series so far, and it arrived in the quarter revenue nearly doubled. If the next print holds revenue and recovers margin, the AI-server trade is working. If margin keeps falling as revenue grows, Dell is buying share.
And what happens to the 95 mechanically. The growth term compares against the year-ago quarter, so next year's first quarter is measured against $43,842M rather than $23,378M. Dell would have to grow from the doubled base to hold the same growth rate. On flat revenue the growth term goes to zero and the score falls to roughly the free-cash-flow margin alone — single digits, on the same business. That is not a forecast about Dell; it is what the formula does when a step change laps itself, and it is the reason a 95 is a statement about one comparison rather than a level.
The two numbers worth carrying forward are the ones the composite drops: revenue per quarter, and what Dell keeps of it.
Dell and Broadcom figures are from our stored revenue, free-cash-flow and gross-margin series for Dell and Broadcom. Rule of 40 scores are computed on this site's house definition — year-over-year revenue growth plus free-cash-flow margin, free cash flow being operating cash flow less capital expenditure — as set out in our explainer; the two scores are 94.65 and 94.14 unrounded. All Dell figures are quarterly and carry their period end, because Dell's fiscal year ends in late January and a bare "Q1" would be ambiguous. The five-name table is a sweep of the latest quarter of every company we track carrying both a score and a gross margin, filtered to a score above 40 and a gross margin below 35%. No price, valuation or share-move figure appears above.