Dell forecasts upbeat growth targets on strength in AI server sales
DELL forecast fourth-quarter revenue and profit above Wall Street estimates on Tuesday, as increasing investments in data centres to support artificial intelligence applications boost demand for its servers.
The company also announced the permanent appointment of David Kennedy as its finance chief.
Dell, which raised its annual revenue and profit expectations, offers AI-optimised severs equipped with Nvidia’s powerful chips.
Its strong forecasts could ease investor concerns about the margin hit due to intense competition in the AI server market from rivals such as Super Micro Computer and the high costs of building the products.
Dell now expects US$25 billion in fiscal 2026 revenue from AI server shipments, up from its prior view of US$20 billion. The company had previously raised the forecast in August.
Having secured deals with the US Department of Energy and Abu Dhabi’s AI firm G42, the company also counts Elon Musk’s AI startup xAI and CoreWeave among its customers.
Dell expects fourth-quarter revenue between US$31.0 billion and US$32 billion, above analysts’ average estimate of US$27.59 billion, according to data compiled by LSEG.
Adjusted profit forecast of US$3.50 per share was also above estimates of US$3.21.
The company raised its annual revenue forecast to between US$111.2 billion and US$112.2 billion from its earlier expectations of US$105 billion to US$109 billion. It expects adjusted earnings per share of $9.92, up from its prior projection of US$9.55.
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“AI momentum is accelerating in the second half of the year, leading to record AI server orders of US$12.3 billion and an unprecedented US$30 billion in orders year to date,” chief operating officer Jeff Clarke said in a statement.
Third-quarter revenue of US$27.01 billion slightly missed estimates of US$27.13 billion.
Dell’s revenue for infrastructure solutions group, which includes its storage, software and server offerings, rose 24 per cent to US$14.11 billion, while that of the client solutions group - home to PCs - rose 3 per cent to US$12.48 billion.
Adjusted profit for the quarter ended Oct 31 was US$2.59 per share, above estimates of US$2.47. REUTERS
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