Dell projects $50 billion in AI server sales as surging demand transforms the company

Dell Jumps After Projecting AI Server Sales of $50 Billion

Dell Technologies Inc. shares jumped in extended trading after the company gave an outlook for sales of its artificial intelligence servers that exceeded estimates, a sign of robust demand for machines helping fuel the AI data center build-out. The company will generate about $50 billion in AI server revenue in the current fiscal year, which ends in January 2027, Dell said Thursday in a statementBloomberg Terminal. "The AI opportunity is transforming our company," Chief Operating Officer Jeff Clarke said in the statement. Dell enters the year "with a record backlog of $43 billion -- powerful proof that our engineering leadership and differentiated AI solutions are winning," he said. Dell's servers designed to run AI workloads are attracting customers from companies that rent computing power like CoreWeave Inc. and Nscale Global Holdings Ltd., as well as corporate clients and major AI providers. The Texas-based company has been working to hold down costs and improve margins even as prices for memory chips rise rapidly. In the fiscal fourth quarter, Dell reported an operating margin of 14.8% for its server and networking unit, compared with an average estimate of 12.9%. In its computer unit, the margin was 4.7%. Analysts, on average, projected 6.18%. "Across the industry, the environment remains highly dynamic, with unprecedented AI demand creating sustained supply tightness and frequent pricing resets" Clarke said in prepared remarks, referring to the memory chip issue. The shares gained about 10% in extended trading after closing at $121.45 in New York. The stock has increased 5% in the past 12 months. Earnings, excluding some items, will be about $12.90 a share in the current fiscal year, Dell said in the statement. Sales will be about $140 billion. Analysts, on average, projected profit of $11.56 a share on revenue of $126.3 billion. The company also announced a $10 billion increase in its share buyback program. In the quarter, total sales increased 39% to $33.4 billion, compared with the average estimate of $31.7 billion. Profit, excluding some items, was $3.89 a share. Analysts, on average, projected $3.52. Revenue produced by the infrastructure group increased 73% to $19.6 billion. Sales in the computer unit, called the Client Solutions Group, jumped 14% to $13.5 billion.

Dell's stock pops as soaring AI demand drives stellar 39% revenue increase - SiliconANGLE

Dell's stock pops as soaring AI demand drives stellar 39% revenue increase Data center hardware and personal computer maker Dell Technologies Inc. easily beat Wall Street's expectations today as it posted its latest financial results, benefitting from surging artificial intelligence demand. The company reported fourth-quarter earnings before certain costs such as stock compensation of $3.89 per share on sales of $33.38 billion, up by a staggering 39% from the same period one year earlier. Wall Street analysts had been looking for earnings of just $3.53 per share on much lower sales of just $31.67 billion. Dell's profitability increased commensurately with its revenue. It posted net income of $2.26 billion in the quarter, rising from a $1.53 billion profit in the year-ago period. Over the last few years, Dell has leveraged its close relationship with the chipmaker Nvidia Corp. to become one of the world's top sellers of data center servers and networking gear used by enterprises to power their AI projects. Demand for that hardware has surged, and Dell has become one of the most reliable suppliers of AI servers at a time when Nvidia's powerful graphics processing units are in short supply. During the quarter, Dell banked more than $8.95 billion worth of sales of AI-optimized servers, up 342% from the year before. Its total servers and networking revenue came in at $14.8 billion, well ahead of the Street's consensus estimate of $13.9 billion. Overall, Dell's infrastructure solutions group generated $19.6 billion in sales, while its client solutions group, which is focused on PCs, added another $13.49 billion. Dell Vice Chairman and Chief Operating Officer Jeff Clarke (pictured) said fiscal 2026 was a defining year in the company's history, during which it delivered record revenue of $113.5 billion. "The AI opportunity is transforming our company. We closed more than $64 billion in AI-optimized server orders, shipped more than $25 billion throughout the year, and are entering fiscal 2027 with a record backlog of $43 billion," he said. "[This is] powerful proof that our engineering leadership and differentiated AI solutions are winning." Even more encouraging is that Dell is seeing demand rise across multiple customer types, including hyperscalers, large enterprises and government customers. Clarke said on a conference call with analysts that its AI server customer base now surpasses 4,000 clients. Dell doesn't expect to slow down anytime soon. For the first quarter, it's looking for earnings of about $2.90 per share at the midpoint of its guidance range, with revenue of between $34.7 billion and $35.7 billion. That's well ahead of the Street's consensus, which calls for earnings of just $2.34 per share on sales of about $29 billion. For the full year, Dell is aiming for a $12.90 per share profit on sales of between $138 billion and $142 billion. Wall Street is looking for just $11.45 per share on $124.7 billion in revenue. Not surprisingly, the market reacted positively to Dell's bullish forecast. The company's stock rose more than 11% in the after-hours trading session. The stock is down 3% in the year to date. Dave Vellante, founder and chief analyst of SiliconANGLE Media's sister organization theCUBE Research, said Dell had a blowout quarter, with both AI servers and traditional systems in strong demand. "Positives were server growth, margin expansion, free cash flow growth, strong guidance and returns of capital to shareholders," he said. "Dell's balance sheet keeps getting stronger and the company is riding the AI infra wave to new heights." The analyst noted the almost symbiotic relationship between Dell and Nvidia, with the company's fortunes mirroring those of the chipmaker since becoming one of the premier channels for GPUs. But Nvidia's earnings results this week had a much more muted reception from shareholders. "Dell seems to have a formula that is breaking through the negative sentiment," Vellante said. One secret may be the way Dell has handled the rising memory chip costs that have plagued the rest of the technology industry. Demand for memory components has outpaced the available supply due to the rise in AI server sales, putting pressure on tech hardware manufacturers and their margins. However, Dell's gross margins were 20.5% in the quarter, higher than the 20.3% that analysts had expected. Clarke told analysts that the supply environment remains extremely dynamic, with unprecedented AI demand resulting in frequent pricing resets. But he said the company is "managing this environment in real time, applying lessons learned from prior cycles to improve resilience" and strengthen its position.

Dell stock jumps as strong AI server demand boosts sales forecast

Dell stock is rising because the company expects very strong demand for AI servers. Big tech companies are spending huge money on AI infrastructure, which helps Dell get more orders. The company also gave higher sales and profit forecasts than expected. Even though chip costs are rising, Dell believes AI demand will keep growing and support its future business. Dell Technologies said it expects very high sales from its AI servers this year. This shows strong demand for machines used in AI data centers. The company said it may earn about $50 billion from AI servers in the current financial year ending January 2027. Dell's COO Jeff Clarke said AI is changing the company and it already has a record backlog of $43 billion orders. Dell's AI servers are being bought by cloud computing firms like CoreWeave and Nscale Global Holdings, along with big AI companies and businesses. The company is trying to control costs because memory chip prices are rising fast, which makes servers expensive. Dell's server division reported a 14.8% operating margin, higher than analysts' estimate of 12.9%. The computer division margin was 4.7%, lower than analysts' expected 6.18%, as stated by Bloomberg. Jeff Clarke said AI demand is very high and this is causing short supply and changing prices often. Dell stock jumps after results Dell shares jumped about 6% after the news, after closing at $121.45. The company expects annual profit of about $12.90 per share and total yearly sales near $140 billion. Analysts had expected lower numbers -- about $11.56 profit per share and $126.3 billion revenue. In the latest quarter, Dell's total sales rose 39% to $33.4 billion, beating estimates. Quarterly adjusted profit was $3.89 per share, higher than analysts' prediction of $3.52. Dell said its total yearly revenue forecast for fiscal 2027 is $138-$142 billion, above Wall Street estimates, as noted by Reuters. Demand is growing because big tech firms like Alphabet, Microsoft, Amazon, and Meta plan to spend around $630 billion on AI infrastructure. This spending will help server makers like Dell and its rival Super Micro Computer. Dell stock faces chip cost pressure Rising memory chip costs and US trade rules have forced Dell and HP Inc. to increase prices to manage costs. Memory chips are very important in AI servers because they store data and help processors run fast. Dell expects AI server revenue to grow 103% to $50 billion in fiscal 2027. Dell said it now has over 4,000 AI server customers, including Elon Musk's startup xAI. Memory chip shortages may reduce global demand for gadgets like PCs and phones. China's Lenovo also warned about pressure on PC shipments. Dell's infrastructure solutions group revenue jumped 73% to $19.6 billion, driven by storage and servers, as cited by Reuters. Its PC business sales grew 14% to $13.49 billion. Dell stock rose because AI server demand is booming, and the company expects huge future revenue from AI infrastructure. FAQs Q1. Why did Dell Technologies stock go up? Dell stock rose because the company gave strong forecasts for AI server sales and higher future revenue. Q2. What is helping Dell grow fast right now? High demand for AI servers from big tech companies and cloud firms is driving Dell's strong growth.