DELL Technologies gave a full-year profit outlook that topped estimates and said it had booked large deals for artificial intelligence (AI) servers, stoking optimism the company is poised for long-term growth during the AI boom.
Earnings, excluding some items, will be about US$9.30 a share on sales of US$101 billion to US$105 billion in the fiscal year ending in January 2026, the Texas-based company said on Thursday (Feb 27). Analysts, on average, projected a profit of US$9.24 a share on revenue of US$103 billion.
The need for computing to run AI tools has led to a boom for makers of high-powered servers such as Dell, Super Micro Computer and Hewlett Packard Enterprise. Dell’s backlog for AI servers jumped to US$9 billion after the end of the fourth quarter after deals with Elon Musk’s xAI and other customers, chief operating officer Jeff Clarke said. Earlier this month, Bloomberg reported that Dell was securing a massive US$5 billion server order with Musk’s startup.
For the full year, Dell expects US$15 billion in revenue from AI servers. That’s roughly a 50 per cent jump over the US$9.8 billion of AI servers it shipped in the fiscal year that ended Jan 31.
“We are well positioned to capture growth across every segment of our business,” Clarke said. “Our prospects for AI are strong, as we extend AI from the largest cloud service providers, into the enterprise at scale, and out to the edge with the PC.”
The shares gained about 3.5 per cent in extended trading after closing at US$107.83 in New York. The stock has declined 6.4 per cent this year.
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In the fiscal fourth quarter, sales jumped 7.2 per cent to US$23.9 billion. Analysts, on average, estimated US$24.6 billion. Profit, excluding some items, was US$2.68 a share in the period, which ended Jan 31.
Dell’s infrastructure unit generated US$11.4 billion, compared with the average estimate of US$11.8 billion. Of that, US$2.1 billion came from the shipment of AI servers, while Wall Street expected US$2.77 billion.
Dell’s computer business declined 1 per cent to US$11.9 billion, fuelled by a 12 per cent drop in consumer personal computer (PC) sales. Business-oriented PC sales rose 5 per cent to US$10 billion.
A recovery in the long-ailing PC has started to materialise in recent quarters. PC shipments ticked up 1.8 per cent in the fourth quarter of 2024, according to IDC, an industry research firm. BLOOMBERG
