Dell Doubles Growth Forecast on Surging AI Server Demand

Reviewed byNidhi Govil

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Dell Technologies significantly raises its long-term revenue and profit growth projections, citing strong demand for AI servers. The company expects to capitalize on the booming AI infrastructure market, with plans to reach a $20 billion run-rate in AI server shipments by 2026.

Dell's AI-Driven Growth Forecast

Dell Technologies has significantly raised its long-term growth projections, betting big on the burgeoning demand for AI infrastructure. The company now anticipates annual revenue growth of 7-9% through fiscal 2030, nearly doubling its previous forecast of 3-4%

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. This optimistic outlook is primarily driven by the surging demand for AI servers and related infrastructure.

Source: Market Screener

Source: Market Screener

AI Server Demand Fuels Expansion

Dell's Infrastructure Solutions Group, responsible for server, storage, and networking products, is now expected to grow at an impressive 11-14% annually, up from the previous 6-8% projection

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. The company has already shipped billions of dollars worth of AI servers and anticipates reaching a $20 billion run-rate by 2026

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Key Clients and Partnerships

Dell's growth is supported by partnerships with major players in the AI space. Clients include cloud service providers and specialized AI infrastructure firms such as CoreWeave and Elon Musk's xAI

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. The company's role as a key customer of Nvidia, purchasing chips to build AI-optimized servers, positions it well in the hardware supply chain

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Financial Projections and Market Response

Dell has raised its adjusted earnings per share growth forecast to at least 15% annually, nearly doubling the previous estimate of 8%

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. The company also committed to increasing its dividend by at least 10% annually through fiscal 2030

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. Following the announcement, Dell's stock rose by approximately 5%

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Source: Tom's Hardware

Source: Tom's Hardware

Challenges and Market Dynamics

While the outlook is positive, Dell faces potential challenges. The company's ability to source high-end Nvidia accelerators remains a limiting factor, particularly for its AI-optimized PowerEdge line

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. Additionally, some financial analysts have flagged margin risk as AI server competition intensifies, potentially squeezing profitability despite accelerated top-line growth

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PC Market and Future Strategy

While AI infrastructure is now Dell's main focus, the company maintains a presence in the PC market. However, projections for this segment are more modest, with a compound annual growth rate of only 1% expected for client PCs

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. Dell sees the best opportunity for continued growth in commercial systems rather than the broader consumer market.

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