Dell Raises AI Server Revenue Forecast to $25 Billion Amid Strong Q4 Outlook

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 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)