Dell Projects $15 Billion in AI Server Sales for FY2026 Amid Mixed Q4 Results

Dell Technologies Expects To Sell $15B In AI Servers This Year Amid 'Optimistic' Outlook For 2025, COO Jeff Clarke Says

'These reasoning models will consume more computational capability. They're moving to be multimodal, which even consumes more. I kind of like where this is going. We're optimistic,' says Dell Technologies Vice Chairman and COO Jeff Clarke. Dell Technologies Vice Chairman and COO Jeff Clarke said that the company is "optimistic" about AI adoption by cloud service providers and enterprises as it looks to the year ahead with a plan to sell $15 billion in AI servers alone in the coming fiscal year. "These large-scale systems are accelerating and getting bigger. Models are quickly moving to reasoning models, which consume and require more computational capability, i.e., more computers," Clarke told investors during the company's recent fourth quarter 2025 earnings call. "These reasoning models will consume more computational capability. They're moving to be multimodal, which even consumes more. I kind of like where this is going. We're optimistic." Clarke said while "everybody" is pursuing cloud service providers and enterprise customers, Dell Technologies is winning those deals with its all-in-one approach that includes not just hardware, but set-up, services and financing. He said the lessons Dell learns as it stands up AI deployments with the "top 30 or so" cloud service providers helps Dell scale to the enterprise. "We have a global service footprint, professional services can show up anywhere to solve any related problem or hands-on in these very large deployments with full-time teams," he said. "Literally, they're 24/7 trying to get them up and running. I think about the financing capabilities that we have in our company and the ability to help these CSPs, these fast-growing companies grow at the rates they want with our financing capabilities." [RELATED: Data Center 50: The Hottest Data Center Companies Of 2025] Dell is already off to a fast start to meet its ambitious AI server growth sales projection with a 54 percent leap in server sales in the most recent quarter compared to the year ago period. Dell's overall revenue for the fiscal year ended February 2 was $95.6 billion for growth of 8 percent versus last year with net income of $4.57 billion. For the fourth quarter, Dell sales reached $23.9 billion for growth of 7 percent year over year. Net income for the quarter was $1.53 billion, a year-over-year increase of 27 percent. The Round Rock, Texas-based company is telling Wall Street that in the coming fiscal year its total revenue will return to record territory with expected sales of between $101 billion and $105 billion. As to the $15 billion in projected AI server sales this year, Clarke stressed that Dell is winning by helping customers deploy the large-scale AI clusters faster than competitors. "We help these large-scale clusters get deployed faster than anybody else," he said. "I'll remind you, I probably did last time as well, we were the first to bring to market a (Nvidia Blackwell) GB200 rack. That's not by luck. It's by a lot of hard work, detailed engineering, collaborating in this case with Nvidia and our customer to be able to take out every ounce of time and run at the speed of light, so to speak. So we're going to continue to invest in that differentiation. We're going to continue to make us stand out to be different." Below is a look at some of the insights Clarke shared related to the "optimistic" outlook for a year ahead including a look at server sales, storage sales and how Dell is mitigating the impact of tariffs.

Dell forecasts $15 billion of AI server sales this year

Michael Dell, chairman and chief executive officer of Dell Inc., speaks during the Dell Technologies World conference in Las Vegas, Nevada, US, on Monday, May 20, 2024. Dell reported fourth-quarter sales that fell short of analysts' estimates but earnings topped Wall Street expectations. Here's how the hardware company did versus LSEG consensus estimates: Dell shares are down less than 5% so far in 2025, but the company's stock has more than doubled in the last two years due to soaring demand for artificial intelligence systems, often based around Nvidia graphics processing chips. Dell sells Nvidia-based servers to Elon Musk's xAI, for example, and said it had $4.1 billion in backlogged AI server orders at the end of January. Dell said it sold about $10 billion of AI-optimized servers in its fiscal 2025, and expects to sell about $15 billion in AI system sales in the current year. Current quarter revenue will be between $22.5 and $23.5 billion, Dell said, trailing the average estimate of $23.59 billion, according to LSEG. The company guided for adjusted earnings per share during the quarter of $1.65, versus $1.76 estimated by analysts. Dell expects between $101 billion and $105 billion of revenue in its fiscal 2026, about inline with LSEG estimates of $103.17 billion. Earnings per share for the full year will be $9.30, the company said, topping estimates of of $9.23 Net income increased to $1.53 billion, or $2.15 per share, from $1.21 billion, or $1.66 per share, in the year-ago period. Dell raised its dividend by 18% and announced $10 billion in share repurchase authorization. Revenue rose 7% in the fourth quarter, driven by the company's Infrastructure Solutions Group, its server division, which saw sales rise 22% to $11.35 billion. That was under a StreetAccount estimate of $11.7 billion in sales. Dell's client solutions group, its biggest business, saw sales rise 5% to $11.88 billion, due to a sluggish laptop market. StreetAccount was expecting $11.98 billion in revenue. Dell revealed on Thursday that it had discovered that some of its suppliers had given it credits that were not recorded or that were recorded at the wrong time. The impact was "not material," Dell said, adding that it had restated prior financial statements in 2024 and 2025. "The company initiated an investigation that indicated that the credits resulted from the actions of certain employees that support a limited number of suppliers, impacting the Client Solutions Group segment and overstating cost of goods sold by approximately $200 million in fiscal 2024 and $148 million in fiscal 2025 for the nine months ended November 1, 2024," Dell said in its press release.

Dell targets $15B in AI server sales this year, but it's not enough for investors - SiliconANGLE

Dell targets $15B in AI server sales this year, but it's not enough for investors Shares of Dell Technologies Inc. were heading lower in extended trading today after the company reported fourth-quarter sales that came in below estimates and offered a mixed revenue outlook for the current quarter. The data center infrastructure and personal computer maker reported earnings before certain costs such as stock compensation of $2.68 per share, beating Wall Street's target of $2.53 per share by a comfortable margin, but it let itself down in terms of revenue. Sales came to just $23.9 billion in the quarter, up 7% from a year earlier but trailing the analysts' consensus estimate of $24.55 billion by a fair distance. Net income increased to $1.53 billion, up from $1.21 billion in the year-ago quarter. Dell's stock fell 2% after-hours and is now down 5% in the year to date, but that may just be a blip, for it's still up more than 50% in the last two years due to soaring demand for artificial intelligence servers powered by Nvidia Corp's graphics processing units. Dell is one of the world's primary suppliers of Nvidia-based server systems, selling those products to companies like Elon Musk's xAI Corp. Dell Chief Operating Officer Jeff Clarke (picture) said on a call with analysts that the company had sold around $10 billion worth of AI-optimized servers in fiscal 2025, and expects that number to increase to $15 billion in the current year. So far, it has already accumulated more than $4.1 billion in AI server orders that are yet to be fulfilled. "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," Clarke insisted. For the current quarter, Dell is looking for sales of between $22.5 billion and $23.5 billion, slightly behind the analyst consensus of $23.59 billion. Its earnings forecast was also off, with Dell calling for $1.65 per share, trailing the Street's estimate of $1.76. For the full year, Dell is looking for sales of between $101 billion and $105 billion, which is more or less in-line with the Street's goal of $103.17 billion in sales. Earnings for the full year will be $9.30, Dell said, topping the Street's $9.23 forecast. Sales in the previous quarter were driven primarily by the company's Infrastructure Solutions Group, which includes its server products, plus storage arrays and networking equipment. Revenue there rose 22% to $11.35 billion, short of the Street's target of $11.7 billion. The Client Solutions business, which includes personal computer sales, delivered $11.88 billion in sales, up 5% from a year earlier. Analysts had been looking for $11.98 billion. Dell told investors that it's increasing its annual dividend to shareholders by 18%, to $2.10 per share. Dell wasn't the only company to let shareholders down today, for its industry peers HP Inc. and NetApp Inc. also came up short with some of their key numbers. Both stocks were headed south in late trading. HP's results were decidedly mixed, with earnings coming to 74 cents per share, just shy of the Street's 75 cent target, while revenue crept up by 2% to $13.5 billion, topping the forecast of $13.39 billion. For the fiscal second quarter, HP said it's anticipating earnings of between 75 cents and 85 cents per share, below the Street's estimate of 86 cents. The outlook includes a 13 cent hit related to restructuring and other charges. HP's stock was down more than 3% in the wake of the report. Chief Executive Enrique Lores said the PC maker is seeing strong demand for its latest "AI PCs", which are sparking a new upgrade cycle in the industry. "I would say we see very steady and fast progression from traditional PCs to AI PCs," he told analysts on a conference call. "The market grew 25% quarter-over-over, and we expect this growth to intensify through the rest of the year." HP also revealed plans to lay-off more than 2,000 employees, continuing a cost-cutting campaign that has already seen more than 7,000 workers lose their jobs. Lores said the company will realize approximately $1.9 billion in savings through the plan, though it will be hit with restructuring charges of around $1.2 billion. As for NetApp, its stock was hammered in late-trading, falling more than 14% after it lowered its profit and revenue forecast for fiscal 2025, blaming the shortfall on sluggish demand for data storage services. The company said it's now looking for fiscal 2025 adjusted earnings of between $7.17 and $7.27 per share, down from its earlier forecast of $7.20 to $7.40 per share. It reduced its revenue forecast to a range of $6.49 billion and $6.64 billion, down from its prior estimate of $6.54 billion to $6.74 billion. NetApp's results for the prior quarter were disappointing too. It delivered earnings of $1.91 per share, in-line with the Street's forecast, with revenue coming to $1.64 billion, below the $1.69 billion target.

Dell Technologies Projects $15 Billion AI Server Revenue For FY26, Raises Dividend By 18% Amid A Mixed Quarter - SPDR S&P 500 (ARCA:SPY), Dell Technologies (NYSE:DELL)

Dell Technologies Inc. DELL reported a mixed fourth quarter, however, the management announced an 18% increase in annual dividend and said that it expects the artificial intelligence server business to grow by at least $15 billion in the fiscal year 2026. What Happened: Despite a revenue miss in the fourth quarter, Dell's management remained positive on its AI server business for the fiscal year 2026 during the earnings call. Talking about the outlook, COO Jeff Clarke said, "We expect our AI business will grow to at least $15 billion given our robust opportunity pipeline, our engineering, our services and financing advantages. This AI business drives incremental operating profit and is EPS-accretive." Dell's ISG business or Infrastructure Solutions Group unit that provides IT infrastructure, software, and services was also expected to grow because of the strength in the AI business. CEO Yvonne McGill said, ISG will grow in the high teens, driven by $15 billion of AI server shipments and continued growth in traditional server and storage. The CFO further said that the company will continue to update this estimate. See Also: Rocket Lab Unveils 'Flatellite:' Low-Cost, Mass-Producible Satellite To Target Large Constellations Amid Weak Q1 Guidance Why It Matters: Dell topped fourth quarter earnings estimates with EPS of $2.68, but missed on revenue at $23.9 billion. For fiscal 2026, Dell forecasts revenue of $101-$105 billion and adjusted EPS of $9.30, roughly in line with analyst expectations. "We're raising our annual dividend by 18%, demonstrating our commitment to shareholder return and confidence in our opportunity to grow in FY26," said CEO McGill. Price Action: Dell declined 6.77% on Thursday and fell further 1.23% in after-hours, this outpaced the 2.66% fall in the SPDR S&P 500 ETF Trust SPY, which tracks the S&P 500 index. The stock remains 7.47% lower on a year-to-date basis, however, it's up 15.64% over a year. Benzinga tracks 20 analysts with an average price target of $134.05 for the stock, reflecting a "buy" rating. Estimates range widely from $53 to $185. Recent ratings from Northland Citigroup, B of A Securities, and Morgan Stanley average $141, suggesting a potential 32.39% upside. Read Next: Airbnb Is Nearly 40% More Expensive Than Its Rivals: Here's What Key Indicators For ABNB Stock Reveal Photo courtesy: Shutterstock DELLDell Technologies Inc$106.50-1.23%OverviewSPYSPDR S&P 500$584.89-0.03%Market News and Data brought to you by Benzinga APIs

Dell forecasts decline in annual margin on higher AI server costs

Dell expects its adjusted gross margin rate to decline in fiscal year 2026 due to increased costs for building AI servers. The company announced a $10 billion share buyback despite a 2% drop in shares. Dell predicts annual adjusted profit above analyst estimates, driven by AI server revenues and maintaining competitiveness.Dell on Thursday forecast a decline in its adjusted gross margin rate for fiscal year 2026, hit by higher costs to build artificial intelligence servers in a fiercely competitive market, while its PC business also lagged amid soft demand. The Round Rock, Texas-based company's shares fell about 2% in extended trading, even as it announced a $10 billion increase in its share buyback plan. Dell's AI servers, which are equipped with Nvidia's powerful chips, are designed to handle intense computational demands of training large language models like those that power chatbots such as ChatGPT. That has boosted demand for Dell and its rivals including Super Micro Computer. Dell forecast $15 billion in annual revenue from AI server shipments, 53% higher than the $9.8 billion revenue in the year ended January 31. But costly production of these AI-driven servers are weighing on margins. Dell expects its annual adjusted gross margin rate to decline about 100 basis points. The company said its AI server backlog jumped to roughly $9 billion as of February 27, as it also signed a deal with Elon Musk's xAI startup. Dell forecast annual adjusted profit of $9.30 per share, above analysts' estimate of $9.23, according to data compiled by LSEG. The $103 billion midpoint of the company's annual revenue forecast came in line with estimates. A sweeping U.S. trade tariff on Chinese products also looms, with companies facing the risk of potential price increases on tech products, automotive manufacturing, and services. Dell said it was reviewing the tariff executive orders to assess the impact on its operations and customers, adding that the announcements have not yet impacted the company's pricing. "Whatever tariff we cannot mitigate, we view that as an input cost. As our input costs go up, it may require us to adjust prices," Chief Operating Officer Jeff Clarke said. Research firm International Data Corporation on Thursday lowered its traditional PC forecast for 2025 and beyond, driven by U.S. tariffs on China and weakening market sentiment. Revenue for the fourth quarter ended January 31 stood at $23.93 billion, missing estimates of $24.56 billion. It reported adjusted per-share earnings of $2.68, beating estimates of $2.53. Dell's revenue from its infrastructure solutions group - which includes its storage, software and server offerings - rose 22% to $11.35 billion. Revenue from its client solutions group, which houses PCs, rose 1% to $11.88 billion.

Dell forecasts full-year profit above estimates

(Reuters) - Dell Technologies forecast annual profit above Wall Street estimates on Thursday, while projecting full-year revenue that was in line with market expectations, in a sign of intense jostling in the AI server market. The company faces tough competition from rival PC makers such as HP Inc at a time when a sweeping U.S. trade tariff on China could hurt companies by triggering a price increase on tech products. Research firm International Data Corporation (IDC) on Thursday lowered its traditional PC forecast for 2025 and beyond, driven by U.S. tariffs on China and weakening market sentiment. Demand for Dell's AI servers has been booming. "The deals we've booked with xAI and others put our AI server backlog at roughly $9 billion as of today," Dell's Chief Operating Officer Jeff Clarke said. Dell's AI servers, which are equipped with Nvidia's powerful chips, are designed to handle rising computational demands of training large language models. The company forecast fiscal 2026 adjusted profit of $9.30 per share, above the average analyst estimate of $9.23, according to data compiled by LSEG. The $103 billion midpoint of the company's annual revenue forecast came in line with estimates. Dell also announced an 18% increase in its annual cash dividend and a $10 billion increase in the company's share repurchase authorization. Revenue for the fourth quarter ended January 31 came in at $23.93 billion, missing estimates of $24.56 billion. Dell's revenue from its infrastructure solutions group - which includes its storage, software and server offerings - rose 22% to $11.35 billion. Revenue from its client solutions group, which houses PCs, rose 1% to $11.88 billion. (Reporting by Jaspreet Singh in Bengaluru; Editing by Shounak Dasgupta)

Dell forecasts full-year profit above estimates

Feb 27 (Reuters) - Dell Technologies (DELL.N), opens new tab forecast annual profit above Wall Street estimates on Thursday, while projecting full-year revenue that was in line with market expectations, in a sign of intense jostling in the AI server market. The company faces tough competition from rival PC makers such as HP Inc (HPQ.N), opens new tab at a time when a sweeping U.S. trade tariff on China could hurt companies by triggering a price increase on tech products. Research firm International Data Corporation (IDC) on Thursday lowered its traditional PC forecast, opens new tab for 2025 and beyond, driven by U.S. tariffs on China and weakening market sentiment. Demand for Dell's AI servers has been booming. "The deals we've booked with xAI and others put our AI server backlog at roughly $9 billion as of today," Dell's Chief Operating Officer Jeff Clarke said. Dell's AI servers, which are equipped with Nvidia's (NVDA.O), opens new tab powerful chips, are designed to handle rising computational demands of training large language models. The company forecast fiscal 2026 adjusted profit of $9.30 per share, above the average analyst estimate of $9.23, according to data compiled by LSEG. The $103 billion midpoint of the company's annual revenue forecast came in line with estimates. Dell also announced an 18% increase in its annual cash dividend and a $10 billion increase in the company's share repurchase authorization. Revenue for the fourth quarter ended January 31 came in at $23.93 billion, missing estimates of $24.56 billion. Dell's revenue from its infrastructure solutions group - which includes its storage, software and server offerings - rose 22% to $11.35 billion. Revenue from its client solutions group, which houses PCs, rose 1% to $11.88 billion. Reporting by Jaspreet Singh in Bengaluru; Editing by Shounak Dasgupta Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Technology

Dell Gives Strong Profit Outlook With AI Server Backlog Climbing

Dell Technologies Inc. gave a full-year profit outlook that topped estimates and said it had booked large deals for AI servers. Earnings, excluding some items, will be about $9.30 a share on sales of $101 billion to $105 billion in the fiscal year ending in January 2026, the Texas-based company said Thursday in a statement. Analysts, on average, projected profit of $9.24 a share on revenue of $103 billion.

Dell Earnings Top Expectations as AI-Driven Demand Grows

Dell (DELL) reported fiscal fourth-quarter earnings that exceeded analysts' expectations, as the PC and server maker benefitted from growing demand for artificial intelligence infrastructure. Dell posted adjusted earnings of $1.91 billion, or a record $2.68 per share, up from $1.66 billion, or $2.27 per share, a year earlier and beating expectations. Its revenue of $23.9 billion was up 7% year-over-year but slightly missed the analyst consensus from Visible Alpha. The growth came as servers and networking revenue jumped 37% to $6.6 billion, driven by AI and traditional server demand. Earlier this month, Bloomberg reported Dell was nearing a deal to sell more than $5 billion of servers powered by Nvidia (NVDA) chips to Elon Musk's artificial intelligence company, xAI. The companies have partnered before, with Musk and Dell executives saying last summer that Dell would provide hardware for the AI "supercomputer" the company was planning to build in Memphis, Tennessee. "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," Chief Operating Officer Jeff Clarke said in a release Thursday. "The deals we've booked with xAI and others puts our AI server backlog at roughly $9 billion as of today." Looking ahead, Dell forecast fiscal 2026 revenue of $101 billion to $105 billion and adjusted EPS of $9.30, compared to analysts' expectations of $103.81 billion in revenue and adjusted EPS of $9.28. Shares of Dell climbed 2% in extended trading Thursday following the release. They've gained about 14% over the past year through Thursday's close.