top of page

Dell Forecasts Strong Growth on AI Server Demand

  • tech360.tv
  • 38 minutes ago
  • 2 min read

Dell Technologies has projected fourth-quarter revenue and profit figures exceeding Wall Street estimates, driven by increased investments in data centres for artificial intelligence. This outlook led to a 4% rise in its shares during extended trading.


Rows of black server racks with glowing blue lights in a data center. The setting is industrial, with a futuristic and technological ambiance.
Credit: DELL

The company anticipates fourth-quarter revenue between USD 31 billion and USD 32 billion, surpassing earlier expectations of USD 27.59 billion, according to LSEG-compiled data. Its adjusted profit forecast of USD 3.50 per share also exceeded estimates of USD 3.21.

Dell Technologies logo on a blue geometric background. White text reads "DELL Technologies" with a modern design. Bright, professional mood.
Credit: DELL

Dell also increased its annual revenue forecast to between USD 111.2 billion and USD 112.2 billion, up from prior expectations of USD 105 billion to USD 109 billion. Additionally, it raised its adjusted earnings per share outlook to USD 9.92.


The organisation now expects USD 25 billion in fiscal 2026 revenue from AI server shipments, an increase from its previous forecast of USD 20 billion. Dell offers AI-optimised servers equipped with Nvidia's powerful chips.


Its AI server backlog reached USD 18.4 billion by the end of the third quarter, fueled by USD 12.3 billion in new orders. The company shipped servers worth USD 5.6 billion in the same quarter.


Dell has secured deals with the U.S. Department of Energy and Abu Dhabi’s AI firm G42. Other customers include Elon Musk’s AI startup xAI, and CoreWeave.


The company’s strong forecasts come amid investor concerns regarding margin pressure. This pressure is attributed to competition in the AI server market from rivals such as Super Micro Computer, and the high cost of production.


Big Tech’s efforts to build out AI infrastructure have caused price increases for dynamic random access memory, and NAND. These are two commonly used types of memory chips, experiencing high competition in the server market.


Chief Operating Officer Jeff Clarke noted, "We're in a very unique time. It's unprecedented. We have not seen costs move at the rate we've seen."


Mr. Clarke indicated that the pricing impact could affect the customer base, but Dell will "do everything we can to mitigate that."


Melissa Otto, head of S&P Global Visible Alpha research, suggested that Dell may leverage a market situation where customer demand is higher than available supply, enabling price increases.


In the third quarter, Dell’s revenue was USD 27.01 billion, slightly missing estimates of USD 27.13 billion. However, its adjusted profit of USD 2.59 per share surpassed estimates of USD 2.47.


Dell also announced the permanent appointment of David Kennedy as its finance chief.

  • Dell projects strong fourth-quarter revenue and profit due to AI server demand.

  • The company raised its annual revenue forecast to between USD 111.2 billion and USD 112.2 billion.

  • Fiscal 2026 AI server revenue is now expected to reach USD 25 billion.


Source: REUTERS

 
 
 

As Asia becomes the fastest growing tech adoption region, biz360tv is committed to keeping readers up to date on the latest developments in business technology news in Asia and beyond.

While we use new technologies such as AI to improve our storytelling capabilities, our team carefully select the stories and topics to cover and goes through fact-checking, editing, and oversight before publication. Please contact us at editorial@tech360.tv if you notice any errors or inaccuracies. Your feedback will be vital in ensuring that our articles are accurate for all of our readers.

bottom of page