DELL · Forward model · Traditional servers and networking
What has to happen in Traditional servers and networking
Model as of
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Traditional servers and networking
Basis quarter$8.54B
Final quarter$13.27B
Implied CAGR+9%
Final revenue mix28%
The forgotten half of the ISG story and the better-margin one. $8,543M in the basis quarter, up 92% year over year on absolute server unit growth from datacentre modernisation and consolidation, plus early agentic-AI inference workloads landing on general-purpose compute. It shares the memory and CPU constraint with the AI line, and the same repricing.
Last four quarters
2026 Q4
$5.85B
Reported
2027 Q1
$8.54B
Reported
General-purpose PowerEdge serversNetworking
Sequential growth
+6.0%/qtr
decaying toward +1.0%
ISG guided to roughly 75% growth in Q2 with AI servers down sequentially, so the non-AI ISG lines carry the balance.
Traditional servers and networking
Latest: $13.27B (2032Q1E)
| Period | Value |
|---|---|
| 2026Q4 | $5.85B |
| 2027Q1 | $8.54B |
| 2027Q2E | $9.06B |
| 2027Q3E | $9.51B |
| 2027Q4E | $9.91B |
| 2028Q1E | $10.26B |
| 2028Q2E | $10.57B |
| 2028Q3E | $10.85B |
| 2028Q4E | $11.10B |
| 2029Q1E | $11.33B |
| 2029Q2E | $11.54B |
| 2029Q3E | $11.73B |
| 2029Q4E | $11.91B |
| 2030Q1E | $12.08B |
| 2030Q2E | $12.24B |
| 2030Q3E | $12.40B |
| 2030Q4E | $12.55B |
| 2031Q1E | $12.70B |
| 2031Q2E | $12.84B |
| 2031Q3E | $12.99B |
| 2031Q4E | $13.13B |
| 2032Q1E | $13.27B |
Assumptions & reasoning
- Same two-quarter disclosure hole as AI servers, and the same refusal to fill it. Combined FY2026 Q2+Q3 traditional revenue is derivable at $9,220M; the split between the two quarters is not. The cross-check is exact: $13,849M AI plus $9,220M traditional equals $23,069M, which is the disclosed combined servers-and-networking revenue of $12,944M for Q2 plus $10,125M for Q3.
- Growth starts at 6% sequential because ISG was guided to roughly 75% year-over-year growth in Q2 with AI servers guided DOWN sequentially, which means the non-AI ISG lines have to carry the balance. That is arithmetic on guidance, not enthusiasm.
- A 92% year-over-year comparison laps itself inside four quarters. The decay is deliberately fast - 20% of the gap to a 4%-a-year terminal rate per quarter - because a refresh wave that is partly memory-driven price inflation cannot repeat itself.
- The margin is ISG's blended 10.5% plus 1.7% D&A, the same figure the AI line carries, because Dell does not split ISG operating income by product line. Holding this line's terminal margin at 12.0% while the AI line glides to 10.0% is an assumption about mix inside ISG, not a reported difference.