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Dell Lifts Revenue Outlook as AI Server Sales Surge, Shares Jump 5%

Prime Highlight

  • Dell raised its full-year revenue outlook and projected a much stronger fourth quarter, driven by rapid growth in AI server demand.
  • Shares rose about 5% in extended trading after the company said AI demand continues to exceed expectations.

Key Facts

  • Fiscal Q3 revenue reached $27.01 billion, slightly below estimates, while adjusted EPS beat forecasts at $2.59and net income rose to $1.54 billion.
  • Dell boosted its AI server shipment target to $25 billionfor the year and expects $31.5 billion in revenue next quarter, far above analyst projections.

Background

Dell Technologies raised its full-year revenue outlook and forecast a stronger fourth quarter on Tuesday, as rapid growth in artificial intelligence server sales offset a slight miss in quarterly revenue. The company’s shares rose about 5% in extended trading after it said AI demand remained well above earlier expectations.

For the fiscal third quarter, Dell reported revenue of $27.01 billion, slightly below analyst estimates of $27.13 billion. Adjusted earnings per share came in at $2.59, beating forecasts. Net income rose to $1.54 billion, up from $1.17 billion a year earlier.

The company expects $31.5 billion in revenue in the fourth quarter, far higher than the $27.59 billion analysts projected. It also raised its full-year revenue guidance to $111.7 billion and increased its AI server shipment target for the year to $25 billion, up from $20 billion.

Dell’s Infrastructure Solutions Group, which includes its data center business, reported $14.11 billion in revenue. Server and networking sales grew 37% to $10.1 billion, supported by $5.6 billion in AI server shipments. Dell said it expects to sell $9.4 billion in AI servers in the current quarter, excluding a recently announced Nvidia-based deal with Neocloud provider Iren.

The company continues to serve large businesses, governments, and emerging AI-focused cloud firms, while relying less on traditional hyperscalers.

Meanwhile, Dell’s Client Solutions Group, which includes laptop and PC sales, generated $12.48 billion in revenue, up 3% year-on-year but short of expectations.

Dell spent $1.6 billion on share buybacks and dividends during the quarter.

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