Dell anticipates optimistic fiscal 2025 AI server demand

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Dell anticipates optimistic fiscal 2025 AI server demand
Dell anticipates optimistic fiscal 2025 AI server demand

Dell Technologies forecasted yearly revenue and profit to exceed Wall Street projections, betting on demand for its artificial intelligence systems, sending the company’s stock up more than 16% in after-hours trading.

Dell Technologies (DELL.N) opened a new tab that predicted annual revenue and profit beyond Wall Street projections on Thursday, betting on demand for its artificial intelligence computers, driving the company’s stock up more than 16% in after-hours trading.

Dell benefits from increased demand for its AI servers, which are outfitted with chip designer Nvidia’s (NVDA.O.) new tab graphics processing units (GPUs), which aid in meeting the demands of high-performance computing.

“Our strong AI-optimized server momentum continues, with orders increasing nearly 40% sequentially and backlog nearly doubling, bringing our fiscal year to $2.9 billion,” Chief Operating Officer Jeff Clarke said in a statement.

“We remain bullish on the coming PC refresh cycle and the longer-term impact of AI on the PC market,” CFO Yvonne McGill said during a post-earnings discussion.

In after-hours trading on Thursday, shares of rival server maker Hewlett Packard Enterprise (HPE.N) fell 3.7% after forecasting quarterly sales lower than Wall Street projections.

Lenovo Group (0992.HK) recently posted solid quarterly earnings, with revenue returning to growth after five quarters of decline.

Canalys, a data analytics organization, reported that the worldwide PC market rebounded to 3% growth in the fourth quarter of 2023 and is currently expected to recover further in 2024.

Dell predicts revenue between $91 billion and $95 billion for the current fiscal year, which is higher than analysts’ average estimate of $92.07 billion, according to LSEG data.

It anticipates annual adjusted profits per share of $7.50, plus or minus $0.25, compared to an expectation of $7.15.

The corporation reported an 11% reduction in revenue to $22.32 billion for the fourth quarter ended February 2, slightly higher than expectations of $22.16 billion. Excluding adjustments, their profit per share was $2.20, compared to expectations of $1.73.

Revenue in the infrastructure solutions group, which includes storage, software, and server services, declined about 6% to $9.33 billion, while revenue in the client solutions group, which houses PCs, fell nearly 12% to $11.72 billion.

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