Dell raises annual profit forecast on strong AI server demand
HighlightsDell raised its annual profit forecast to $9.40 per share, up from the previous estimate of $9.30 per share, driven by strong demand for AI-powered servers using Nvidia's advanced chips. The company reported $12.1 billion in AI orders for the quarter, surpassing total shipments for the entirety of fiscal year 2025 and resulting in a backlog of $14.4 billion. Revenue from Dell's infrastructure solutions group, which includes storage, software, and server offerings, rose by 12 per cent, while revenue from its client solutions group, which encompasses its personal computer business, increased by 5 .
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% 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.
PC refresh cycle is slower than before, but signs show users are moving to Windows 11 PCs, which include AI PCs, Clarke added.
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