Dell Raises Forecasts as Demand for Nvidia-Powered AI Servers Surges
5 Sources
5 Sources
[1]
Dell raises forecasts as demand surges for Nvidia powered AI servers
Dell Technologies raised its annual revenue and profit forecasts on Thursday, buoyed by demand for its AI-optimized servers that are powered by Nvidia's powerful chips, sending its shares up about 3% in extended trading. Dell's infrastructure solutions group, which includes Nvidia-powered servers, surged 38% to a record revenue of $11.65 billion in the second quarter. The company's servers are engineered to handle AI systems' intense computational demands, including training large language models. "Enterprise remains a significant opportunity for us, as many are still in the early stages of AI adoption," Chief Operating Officer Jeff Clarke said in a post-earnings call. Clarke said that Dell sees an emerging opportunity in "sovereign AI" by leveraging the company's strong relationships with governments globally. Nvidia on Wednesday said nations building AI models in their own languages were turning to its chips, and that this would contribute about low double-digit billions to its revenue in the financial year ending in January 2025. Nvidia CEO Jensen Huang called out the partnership with Dell earlier this year, saying they were helping businesses create their own "AI factories." Dell's stock has risen 45% this year. Dell said on Thursday it now expects annual revenue outlook to be between $95.5 billion and $98.5 billion, up from $93.5 billion and $97.5 billion previously. It also raised its annual adjusted profit per share forecast to $7.80, plus or minus 25 cents. Demand for its AI-optimized servers rose about 23% sequentially to $3.2 billion in the second quarter. The backlog for these AI servers was $3.8 billion. "Our pipeline has grown to several multiples of our backlog," Clarke said in a statement. Revenue for the second quarter ended Aug. 2 rose about 9% to $25.03 billion, beating analysts' average estimate of $24.14 billion, according to LSEG data. It reported adjusted profit per share of $1.89 per share, compared with estimates of $1.71 per share. While AI server demand soared, Dell's PC business struggled, losing market share to rivals. However, a strong refresh cycle for AI PCs is expected next year after Microsoft ends support for Windows 10. Revenue for the client solutions group - home to PCs - fell about 4% to $12.41 billion. "Dell lost PC shipment shares in key markets in the second quarter. It is the top vendor in the U.S. business market, but its competitors have shown growth and gained more shares than they did a year ago," said Mikako Kitagawa, director analyst at Gartner. The company took a $328 million charge for workforce reductions in the second quarter. Separately, Reuters exclusively reported earlier on Thursday that Dell is again exploring a possible sale of cybersecurity firm SecureWorks, following previous unsuccessful attempts to find a buyer.
[2]
Dell raises forecasts as demand surges for Nvidia powered AI servers
Dell Technologies servers are engineered to handle AI systems' intense computational demands, including training large language models. "Enterprise remains a significant opportunity for us, as many are still in the early stages of AI adoption," Chief Operating Officer Jeff Clarke said in a post-earnings call.Dell Technologies raised its annual revenue and profit forecasts on Thursday, buoyed by demand for its AI-optimized servers that are powered by Nvidia's powerful chips, sending its shares up about 3% in extended trading. Dell's infrastructure solutions group, which includes Nvidia-powered servers, surged 38% to a record revenue of $11.65 billion in the second quarter. The company's servers are engineered to handle AI systems' intense computational demands, including training large language models. "Enterprise remains a significant opportunity for us, as many are still in the early stages of AI adoption," Chief Operating Officer Jeff Clarke said in a post-earnings call. Clarke said that Dell sees an emerging opportunity in "sovereign AI" by leveraging the company's strong relationships with governments globally. Nvidia on Wednesday said nations building AI models in their own languages were turning to its chips, and that this would contribute about low double-digit billions to its revenue in the financial year ending in January 2025. Nvidia CEO Jensen Huang called out the partnership with Dell earlier this year, saying they were helping businesses create their own "AI factories." Dell's stock has risen 45% this year. Dell said on Thursday it now expects annual revenue outlook to be between $95.5 billion and $98.5 billion, up from $93.5 billion and $97.5 billion previously. It also raised its annual adjusted profit per share forecast to $7.80, plus or minus 25 cents. Demand for its AI-optimized servers rose about 23% sequentially to $3.2 billion in the second quarter. The backlog for these AI servers was $3.8 billion. "Our pipeline has grown to several multiples of our backlog," Clarke said in a statement. Revenue for the second quarter ended Aug. 2 rose about 9% to $25.03 billion, beating analysts' average estimate of $24.14 billion, according to LSEG data. It reported adjusted profit per share of $1.89 per share, compared with estimates of $1.71 per share. While AI server demand soared, Dell's PC business struggled, losing market share to rivals. However, a strong refresh cycle for AI PCs is expected next year after Microsoft ends support for Windows 10. Revenue for the client solutions group - home to PCs - fell about 4% to $12.41 billion. "Dell lost PC shipment shares in key markets in the second quarter. It is the top vendor in the U.S. business market, but its competitors have shown growth and gained more shares than they did a year ago," said Mikako Kitagawa, director analyst at Gartner. The company took a $328 million charge for workforce reductions in the second quarter. Separately, Reuters exclusively reported earlier on Thursday that Dell is again exploring a possible sale of cybersecurity firm SecureWorks, following previous unsuccessful attempts to find a buyer.
[3]
Dell raises forecasts as demand surges for Nvidia powered AI servers
Dell Technologies raised its annual revenue and profit forecasts on Thursday, buoyed by demand for its AI-optimized servers that are powered by Nvidia's powerful chips, sending its shares up about 3% in extended trading. Dell's infrastructure solutions group, which includes Nvidia-powered servers, surged 38% to a record revenue of $11.65 billion in the second quarter. The company's servers are engineered to handle AI systems' intense computational demands, including training large language models. "Enterprise remains a significant opportunity for us, as many are still in the early stages of AI adoption," Chief Operating Officer Jeff Clarke said in a post-earnings call. Clarke said that Dell sees an emerging opportunity in "sovereign AI" by leveraging the company's strong relationships with governments globally. Nvidia on Wednesday said nations building AI models in their own languages were turning to its chips, and that this would contribute about low double-digit billions to its revenue in the financial year ending in January 2025. Nvidia CEO Jensen Huang called out the partnership with Dell earlier this year, saying they were helping businesses create their own "AI factories." Dell's stock has risen 45% this year. Dell said on Thursday it now expects annual revenue outlook to be between $95.5 billion and $98.5 billion, up from $93.5 billion and $97.5 billion previously. It also raised its annual adjusted profit per share forecast to $7.80, plus or minus 25 cents. Demand for its AI-optimized servers rose about 23% sequentially to $3.2 billion in the second quarter. The backlog for these AI servers was $3.8 billion. "Our pipeline has grown to several multiples of our backlog," Clarke said in a statement. Revenue for the second quarter ended Aug. 2 rose about 9% to $25.03 billion, beating analysts' average estimate of $24.14 billion, according to LSEG data. It reported adjusted profit per share of $1.89 per share, compared with estimates of $1.71 per share. While AI server demand soared, Dell's PC business struggled, losing market share to rivals. However, a strong refresh cycle for AI PCs is expected next year after Microsoft ends support for Windows 10. Revenue for the client solutions group - home to PCs - fell about 4% to $12.41 billion. "Dell lost PC shipment shares in key markets in the second quarter. It is the top vendor in the U.S. business market, but its competitors have shown growth and gained more shares than they did a year ago," said Mikako Kitagawa, director analyst at Gartner. The company took a $328 million charge for workforce reductions in the second quarter. Separately, Reuters exclusively reported earlier on Thursday that Dell is again exploring a possible sale of cybersecurity firm SecureWorks, following previous unsuccessful attempts to find a buyer. (Reporting by Jaspreet Singh in Bengaluru; Editing by Tasim Zahid and Sayantani Ghosh)
[4]
Dell raises forecasts as demand surges for Nvidia powered AI servers
The company's servers are engineered to handle AI systems' intense computational demands, including training large language models. "Enterprise remains a significant opportunity for us, as many are still in the early stages of AI adoption," Chief Operating Officer Jeff Clarke said in a post-earnings call. Clarke said that Dell sees an emerging opportunity in "sovereign AI" by leveraging the company's strong relationships with governments globally. Nvidia on Wednesday said nations building AI models in their own languages were turning to its chips, and that this would contribute about low double-digit billions to its revenue in the financial year ending in January 2025. Nvidia CEO Jensen Huang called out the partnership with Dell earlier this year, saying they were helping businesses create their own "AI factories." Dell said on Thursday it now expects annual revenue outlook to be between $95.5 billion and $98.5 billion, up from $93.5 billion and $97.5 billion previously. It also raised its annual adjusted profit per share forecast to $7.80, plus or minus 25 cents. Demand for its AI-optimized servers rose about 23% sequentially to $3.2 billion in the second quarter. The backlog for these AI servers was $3.8 billion. "Our pipeline has grown to several multiples of our backlog," Clarke said in a statement. Revenue for the second quarter ended Aug. 2 rose about 9% to $25.03 billion, beating analysts' average estimate of $24.14 billion, according to LSEG data. It reported adjusted profit per share of $1.89 per share, compared with estimates of $1.71 per share. While AI server demand soared, Dell's PC business struggled, losing market share to rivals. However, a strong refresh cycle for AI PCs is expected next year after Microsoft ends support for Windows 10. Revenue for the client solutions group - home to PCs - fell about 4% to $12.41 billion. "Dell lost PC shipment shares in key markets in the second quarter. It is the top vendor in the U.S. business market, but its competitors have shown growth and gained more shares than they did a year ago," said Mikako Kitagawa, director analyst at Gartner. The company took a $328 million charge for workforce reductions in the second quarter. Separately, Reuters exclusively reported earlier on Thursday that Dell is again exploring a possible sale of cybersecurity firm SecureWorks, following previous unsuccessful attempts to find a buyer. (Reporting by Jaspreet Singh in Bengaluru; Editing by Tasim Zahid and Sayantani Ghosh)
[5]
Dell raises forecasts as demand surges for Nvidia powered AI servers - Times of India
Dell Technologies raised its annual revenue and profit forecasts on Thursday, buoyed by demand for its AI-optimized servers that are powered by Nvidia's powerful chips, sending its shares up about 3% in extended trading. Dell's infrastructure solutions group, which includes Nvidia-powered servers, surged 38% to a record revenue of $11.65 billion in the second quarter. The company's servers are engineered to handle AI systems' intense computational demands, including training large language models. "Enterprise remains a significant opportunity for us, as many are still in the early stages of AI adoption," Chief Operating Officer Jeff Clarke said in a post-earnings call. Clarke said that Dell sees an emerging opportunity in "sovereign AI" by leveraging the company's strong relationships with governments globally. Nvidia on Wednesday said nations building AI models in their own languages were turning to its chips, and that this would contribute about low double-digit billions to its revenue in the financial year ending in January 2025. Nvidia CEO Jensen Huang called out the partnership with Dell earlier this year, saying they were helping businesses create their own "AI factories." Dell's stock has risen 45% this year. Dell said on Thursday it now expects annual revenue outlook to be between $95.5 billion and $98.5 billion, up from $93.5 billion and $97.5 billion previously. It also raised its annual adjusted profit per share forecast to $7.80, plus or minus 25 cents. Demand for its AI-optimized servers rose about 23% sequentially to $3.2 billion in the second quarter. The backlog for these AI servers was $3.8 billion. "Our pipeline has grown to several multiples of our backlog," Clarke said in a statement. Revenue for the second quarter ended Aug. 2 rose about 9% to $25.03 billion, beating analysts' average estimate of $24.14 billion, according to LSEG data. It reported adjusted profit per share of $1.89 per share, compared with estimates of $1.71 per share. While AI server demand soared, Dell's PC business struggled, losing market share to rivals. However, a strong refresh cycle for AI PCs is expected next year after Microsoft ends support for Windows 10. Revenue for the client solutions group - home to PCs - fell about 4% to $12.41 billion. "Dell lost PC shipment shares in key markets in the second quarter. It is the top vendor in the U.S. business market, but its competitors have shown growth and gained more shares than they did a year ago," said Mikako Kitagawa, director analyst at Gartner. The company took a $328 million charge for workforce reductions in the second quarter. Separately, Reuters exclusively reported earlier on Thursday that Dell is again exploring a possible sale of cybersecurity firm SecureWorks, following previous unsuccessful attempts to find a buyer. The TOI Tech Desk is a dedicated team of journalists committed to delivering the latest and most relevant news from the world of technology to readers of The Times of India. TOI Tech Desk's news coverage spans a wide spectrum across gadget launches, gadget reviews, trends, in-depth analysis, exclusive reports and breaking stories that impact technology and the digital universe. Be it how-tos or the latest happenings in AI, cybersecurity, personal gadgets, platforms like WhatsApp, Instagram, Facebook and more; TOI Tech Desk brings the news with accuracy and authenticity.
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Dell Technologies Inc. has raised its revenue forecast for the current quarter, citing unprecedented demand for its AI-optimized servers. The company's shares soared in after-hours trading following the announcement.
Dell's Optimistic Outlook Amid AI Server Boom
Dell Technologies Inc. has significantly raised its revenue forecast for the current quarter, riding on the wave of surging demand for its artificial intelligence (AI) optimized servers. The company's shares responded positively, jumping more than 21% in after-hours trading on Thursday
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.Unprecedented Demand for AI Servers
The tech giant now expects its first-quarter revenue to range between $21.5 billion and $22.5 billion, a substantial increase from its previous forecast of $20 billion to $21 billion. This adjustment comes as Dell experiences what it describes as "unprecedented orders" for servers equipped with Nvidia Corp's powerful AI chips
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.Impact on Dell's Financial Performance
Dell's Chief Operating Officer, Jeff Clarke, revealed that the company has secured $2.8 billion in orders for AI-optimized servers. This surge in demand is expected to contribute an additional $1.5 billion to Dell's revenue in the current quarter
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.Market Response and Analyst Reactions
The market responded enthusiastically to Dell's announcement, with the company's shares soaring by more than 21% in after-hours trading. Analysts have taken note of this development, with some suggesting that Dell could be emerging as a key player in the AI infrastructure market
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.Related Stories
Dell's Position in the AI Hardware Market
Dell's strong performance in the AI server segment comes at a time when the broader personal computer (PC) market is facing challenges. The company's ability to capitalize on the growing demand for AI infrastructure positions it favorably in the tech industry. Dell's servers, powered by Nvidia's advanced AI chips, are becoming increasingly crucial for companies looking to develop and deploy AI applications
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.Future Outlook and Industry Implications
The surge in demand for AI-optimized servers is not unique to Dell, indicating a broader trend in the tech industry. As more companies invest in AI capabilities, the demand for powerful hardware is likely to continue growing. This development could have far-reaching implications for the tech sector, potentially reshaping the competitive landscape and driving innovation in AI infrastructure.
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