Dell Surges on Strong AI Server Demand, Raises Annual Revenue Forecast to $25 Billion

Dell misses on revenue, offers strong forecast driven by AI sales

The Dell Technologies logo is on display at the International Broadcasting Convention (IBC2025) on Sept. 12, 2025 in Amsterdam, Netherlands. Dell reported fiscal third-quarter earnings on Tuesday that missed Wall Street expectations for revenue, but the company forecasted a stronger-than-expected fourth quarter driven by increased AI sales. Dell shares fell slightly in extended trading. Here's how Dell did versus LSEG consensus estimates: Dell said it expects about $31.5 billion in sales in the fourth quarter versus $27.59 billion estimated by analysts. The company said it expects fourth-quarter earnings per share of $3.50 versus $3.21 expected. The company said it was raising its expectations for AI server shipments during the year to $25 billion, up from $20 billion, and raised its full-year revenue guidance to $111.7 billion from $107 billion. Dell reported $1.54 billion in net income, or $2.28 per diluted share, during the quarter, versus $1.17 billion, or $1.64, in the year-ago period. The company is an important bellwether for the health of the AI infrastructure industry as one of the top vendors for systems based around Nvidia's graphics processors. Overall revenue in the quarter rose 11% on an annual basis. Dell's main customers for its artificial intelligence systems are big businesses, governments and so-called neoclouds like CoreWeave. Dells sells less to big cloud companies typically called hyperscalers, which have been the most voracious Nvidia buyers so far. The company said it expects to sell $9.4 billion of AI servers in the fourth quarter, and that doesn't include a deal announced in November to sell Nvidia-based GB300 systems to Iren, a neocloud that plans to rent them out to Microsoft. Dell's data center business, called Infrastructure Solutions Group, reported $14.11 billion in sales, in-line with analyst estimates. Of that, $10.1 billion was for servers and networking parts, which was up 37% on an annual basis. Much of that increase was driven by $5.6 billion in AI server shipments. Dell said it sold $4 billion of storage gear during the quarter. But the company said that its laptop and PC business, called Client Solutions Group, reported $12.48 billion in sales, which was up 3% year-over-year but slightly lower than the $12.65 billion expected by analysts. Dell's laptop and PC business was hit particularly hard, declining 7% on an annual basis. The company said it spent $1.6 billion during the quarter on share repurchases and dividends.

Dell bets on rising AI server demand to forecast higher growth

Dell's fourth-quarter revenue and profit forecasts surpassed Wall Street expectations, driven by surging demand for its AI-optimized servers. The company raised its annual revenue outlook significantly, projecting $25 billion from AI server shipments in fiscal 2026. Dell's AI server backlog reached $18.4 billion, fueled by substantial new orders and key customer wins. Dell forecast fourth-quarter revenue and profit above Wall Street estimates on Tuesday, as increasing investments in data centers to support artificial intelligence boost demand for its servers, sending its shares up 4% in extended trading. 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-optimized severs equipped with Nvidia's powerful chips. Its strong forecasts comes amid investor concerns about margin pressure due to competition in the AI server market from rivals such as Super Micro Computer and costly production. Dell now expects $25 billion in fiscal 2026 revenue from AI server shipments, up from its prior view of $20 billion. The company's AI server backlog rose to $18.4 billion by the end of third quarter, fueled by $12.3 billion in new orders. It shipped servers worth $5.6 billion in the quarter. Having secured deals with the U.S. 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. Big Tech's push to build out AI infrastructure has triggered price increases for dynamic random access memory and NAND - two commonly used types of memory chips - amid high competition in the server market. "We're in a very unique time. It's unprecedented. We have not seen costs move at the rate we've seen," Chief Operating Officer Jeff Clarke said on the post-earnings call. Clarke said the pricing impact could make its way into the customer base, but Dell will "do everything we can to mitigate that." In a market where customer demand is higher than the available supply, companies such as Dell gain the ability to increase their prices. Dell may leverage this potential pricing situation, Melissa Otto, head of S&P Global Visible Alpha research said. The company expects fourth-quarter revenue between $31 billion and $32 billion, above expectations of $27.59 billion, according to LSEG-compiled data. Adjusted profit forecast of $3.50 per share was also above estimates of $3.21. Dell raised its annual revenue forecast to between $111.2 billion and $112.2 billion from its earlier expectations of $105 billion to $109 billion. It also raised adjusted earnings per share to $9.92. Third-quarter revenue of $27.01 billion slightly missed estimates of $27.13 billion. Adjusted profit of $2.59 per share beat estimates of $2.47.

Dell AI Server Boom Shocks Goldman -- And The Stock Rallies - Dell Technologies (NYSE:DELL)

Dell's AI Server Boom Shocked Goldman -- And The Stock Could Rocket From Here Shares of Dell Technologies Inc. (NASDAQ:DELL) soared in premarket trading on Wednesday, up about 6%, after the company posted third-quarter earnings that beat expectations and raised its full-year forecast on the back of surging demand for AI servers and improved profitability in its infrastructure division. Dell's strong results prompted Goldman Sachs to raise its 12-month price target from $175 to $185, implying a 47% surge from Tuesday's close. Dell Beats Estimates And Hikes Forecasts On Explosive AI Server Growth Dell's third-quarter earnings for fiscal 2026 delivered a beat-and-raise, driven by one clear catalyst: explosive demand for AI servers, particularly from second-tier cloud service providers and high-margin enterprise customers. AI server orders soared to $12.3 billion, more than doubling from the $5.6 billion recorded in the previous quarter. The headline figure was an earnings per share of $2.59, ahead of consensus estimates at $2.47. Revenue came in at $27 billion, roughly in line with expectations. Dell also saw a clear jump in profitability. Dell's Infrastructure Solutions Group (ISG) EBIT margins improved to 12.4%, up from 8.8%. Goldman Sachs analyst Michael Ng attributed the gains to "improved mix of higher margin customers," reduced one-time costs related to earlier rack deployments, and a shift toward more engineering-intensive GB300 rack designs. For the full year, Dell upgraded its AI server shipment outlook to $25 billion, from a previous estimate of $20 billion. The ISG revenue outlook was also lifted to mid-to-high 30% year-over-year growth, up from mid-to-high 20%. Consumer PCs Still A Drag, But Commercial Holds Up While ISG delivered a strong beat, the Client Solutions Group (CSG) lagged. "CSG revenue and margins missed as consumer revenue weakness (-7% YoY) weighed on accelerating commercial revenue growth (+5% yoy)," Ng said. Despite the weakness, Dell reaffirmed its full-year CSG margin framework of 5%-7% and maintained expectations for a flat PC market in 2026, helped by "continued refresh of aging devices and Windows-11 driven upgrades." CSG revenue for the quarter was $12.5 billion, slightly below expectations. Margins came in at 6%, missing Goldman's estimate of 7.0%. Ng noted the drag came from "competitive pricing in consumer and education markets." Storage and Traditional Servers Quietly Outperform Dell also saw strength outside of AI, particularly in traditional servers and its proprietary storage solutions. "Traditional server demand grew double-digits year-over-year driven by continued data center modernization," Ng said. Storage revenue of $4.0 billion exceeded expectations, and profitability improved sequentially due to a favorable product mix. Ng highlighted "double-digit demand growth across PowerStore, PowerMax, ObjectScale, and PowerFlex offerings." Outlook Raised Across the Board Looking ahead, Dell now expects fourth-quarter revenue of $31 billion to $32 billion, well above consensus estimates. For the full fiscal year 2026, it raised revenue guidance to $111.2 billion to $112.2 billion and lifted its non-GAAP EPS range to $9.82-$10.02, from $9.30-$9.80. Goldman Sachs expects Dell's AI-driven momentum to continue in 2026, supported by a "continued traditional server refresh" and a growing mix of Dell-IP storage offerings -- all contributing to sustained margin expansion. : Image: Shutterstock DELLDell Technologies Inc $132.004.83% Overview Market News and Data brought to you by Benzinga APIs

Dell forecasts upbeat growth targets on strength in AI server sales

(Reuters) -Dell forecast fourth-quarter revenue and profit above Wall Street estimates on Tuesday, as increasing investments in data centers to support artificial intelligence applications boost demand for its servers. Shares of the company rose around 3% in extended trading. The company, which raised its annual revenue and profit expectations, offers AI-optimized 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 $25 billion in fiscal 2026 revenue from AI server shipments, up from its prior view of $20 billion. The company had previously raised the forecast in August. Having secured deals with the U.S. 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 $31.0 billion and $32 billion, above analysts' average estimate of $27.59 billion, according to data compiled by LSEG. Adjusted profit forecast of $3.50 per share was also above estimates of $3.21. The company raised its annual revenue forecast to between $111.2 billion and $112.2 billion from its earlier expectations of $105 billion to $109 billion. It expects adjusted earnings per share of $9.92, up from its prior projection of $9.55. "AI momentum is accelerating in the second half of the year, leading to record AI server orders of $12.3 billion and an unprecedented $30 billion in orders year to date," Chief Operating Officer Jeff Clarke said in a statement. Third-quarter revenue of $27.01 billion slightly missed estimates of $27.13 billion. Dell's revenue for infrastructure solutions group, which includes its storage, software and server offerings, rose 24% to $14.11 billion, while that of the client solutions group - home to PCs - rose 3% to $12.48 billion. Adjusted profit for the quarter ended October 31 was $2.59 per share, above estimates of $2.47. (Reporting by Jaspreet Singh in Bengaluru; Editing by Arun Koyyur)