Dell raises annual profit forecast on strong AI server demand
Dell raised its annual profit forecast on Thursday, signaling growing demand for its AI-powered servers that are equipped with Nvidia's powerful chips.
Shares of the company, whose servers are used by customers such as Elon Musk's AI startup xAI and CoreWeave, rose 2 per cent in extended trading.
Dell and Super Micro Computer have benefited from growing demand for such servers, but the high cost of producing them and tough competition have pressured margins.
"We generated $12.1 billion in AI orders this quarter alone, surpassing the entirety of shipments in all of fiscal 2025 and leaving us with $14.4 billion in backlog," Dell's Chief Operating Officer Jeff Clarke said.
The results follow the U.S. Department of Energy's announcement on Thursday that it would launch a new supercomputer, named Doudna, which will use Dell and Nvidia's advanced technology to perform complex computing tasks.
Dell now expects annual adjusted profit to be $9.40 per share, compared with its prior forecast of $9.30 per share. The company also reiterated its annual revenue outlook.
It forecast second-quarter revenue to be between $28.5 billion and $29.5 billion, above analysts' average estimate of $25.05 billion, according to data compiled by LSEG.
Dell's adjusted profit forecast for the second quarter of $2.25 per share was also above estimates of $2.09.
The company's first-quarter revenue of $23.38 billion beat expectations of $23.14 billion, while its adjusted profit of $1.55 per share missed estimates of $1.69.
"We note potential near-term margin pressure from competitive pricing, tariffs, and geographic mix shifts," Shreya Gheewala, equity analyst at CFRA Research, said.
Revenue from Dell's infrastructure solutions group, which includes storage, software and server offerings, rose 12 per cent, while revenue from its client solutions group, that houses its PC business, rose 5 per cent.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNA
an hour ago
- CNA
Seattle players call for 'fair share' of Club World Cup prize money
Seattle Sounders players called for a bigger slice of the prize money for competing at the Club World Cup this month by wearing T-shirts emblazoned with "Cash Grab" and "Fair Share Now" ahead of a Major League Soccer match on Sunday. Seattle are set to earn at least $9.55 million for competing at the June 14 to July 13 tournament in the U.S., where the total prize money runs to $1 billion, but under the MLS collective bargaining agreement (CBA) the players' share is capped at $1 million per club. Seattle are one of three MLS teams that will compete in the expanded 32-team Club World Cup. Teams from North America are guaranteed almost $10 million just for participating and can earn more depending on their results. MLS did not immediately respond to an emailed request for comment after Seattle players warmed up in T-shirts with the phrases "Club World Cup Ca$h Grab" and "Fair Share Now" written on them ahead of their 2-3 home defeat by Minnesota United. The MLS Players Association said in a statement on Sunday that players had "privately and respectfully invited the league to discuss bonus terms, yet MLS has failed to bring forward a reasonable proposal". It added that the league was "clinging to an out-of-date CBA provision and ignoring longstanding international standards on what players typically receive from FIFA prize money in global competitions. "It is the players who make the game possible. It is the players who are lifting MLS up on the global stage. They expect to be treated fairly and with respect." Seattle are in Group B at the Club World Cup along with Brazil's Botafogo, UEFA Champions League winners Paris St Germain and LaLiga's Atletico Madrid. They face Botafogo in their opening game on June 15.
Straits Times
2 hours ago
- Straits Times
China rejects Trump's accusation that it breached Geneva trade deal
The U.S. and Chinese flags are seen on the day of a bilateral meeting between the U.S. and China, in Geneva, Switzerland, May 10, 2025. KEYSTONE/EDA/Martial Trezzini/Handout via REUTERS/File Photo U.S. Secretary of the Treasury Scott Bessent speaks with with Liao Min, Deputy Minister of Finance of China, during a bilateral meeting between the U.S. and China, in Geneva, Switzerland, May 11, 2025. KEYSTONE/EDA/Martial Trezzini/Handout via REUTERS/File Photo China said on Monday that U.S. President Donald Trump's accusations that Beijing had violated the consensus reached in Geneva trade talks were "groundless", and promised to take forceful measures to safeguard its interests. The comment by the commerce ministry was in response to Trump's remarks on Friday that China had breached a bilateral deal to roll back tariffs. The ministry said China had implemented and actively upheld the agreement reached last month in Geneva, while the U.S. had introduced multiple "discriminatory restrictive" measures against China. Those measures included issuing guidance on AI chip export controls, halting sales of chip design software to China and revoking visas for Chinese students, the ministry added. "The U.S. government has unilaterally and repeatedly provoked new economic and trade frictions, exacerbating uncertainty and instability in bilateral economic and trade relations," the ministry said in a statement. It did not elaborate on what forceful measures it might take in response. Beijing and Washington agreed in mid-May in Geneva to pause triple-digit tariffs for 90 days. In addition, China also promised to lift trade countermeasures that restricted its exports of the critical metals needed for U.S. semiconductor, electronics and defence production. Trump on Friday also announced a doubling of import tariffs on steel and aluminium to 50%. While China is the world's largest steel producer and exporter, it ships very little to the United States after a 25% tariff imposed in 2018 shut most Chinese steel out of the market. China ranks third among aluminium suppliers. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
CNA
3 hours ago
- CNA
China 'firmly rejects' US claim that it violated tariff deal
BEIJING: China said on Monday (Jun 2) it "firmly rejects" US claims that it had violated a sweeping tariffs deal, as tensions between the two economic superpowers showed signs of ratcheting back up. Beijing and Washington last month agreed to slash staggeringly high tariffs on each other for 90 days after talks between top officials in Geneva. But top Washington officials last week accused China of violating the deal, with Commerce Secretary Howard Lutnick saying Beijing was "slow-rolling" the agreement in comments to "Fox News Sunday". China hit back on Monday, saying Washington "has made bogus charges and unreasonably accused China of violating the consensus, which is seriously contrary to the facts". "China firmly rejects these unreasonable accusations," its commerce ministry said in a statement. US President Donald Trump said last week that China had "totally violated" the deal, without providing details. Beijing's commerce ministry said it "has been firm in safeguarding its rights and interests, and sincere in implementing the consensus". It fired back that Washington "has successively introduced a number of discriminatory restrictive measures against China" since the Geneva talks. The ministry cited export controls on artificial intelligence chips, curbs on the sale of chip design software and the revocation of Chinese student visas in the United States. "We urge the US to meet China halfway, immediately correct its wrongful actions, and jointly uphold the consensus from the Geneva trade talks," the ministry said. If not, "China will continue to resolutely take strong measures to uphold its legitimate rights and interests", it added. TRUMP-XI TALKS? US officials have said they are frustrated by what they see as Chinese foot-dragging on approving export licences for rare earths and other elements needed to make cars and chips. But Washington's Treasury Secretary Scott Bessent looked to ease the pressure on Sunday, saying the two sides could arrange a call between their respective heads of state to resolve their differences. "I'm confident ... this will be ironed out" in a call between Trump and Chinese President Xi Jinping, Bessent said on CBS's "Face the Nation". He added, however, that China was "withholding some of the products that they agreed to release", including rare earths. On when a Trump-Xi call could take place, Bessent said: "I believe we will see something very soon." China has been less forthcoming, and the commerce ministry's statement on Monday did not mention any planned conversations between the two leaders. The Geneva deal was "an important consensus reached by the two sides on the principle of mutual respect and equality, and its results were hard-won", the ministry said. It warned Washington against "going its own way and continuing to harm China's interests".
