Reuters – Dell Technologies is forecasting annual profits that are expected to surpass Wall Street’s estimates, primarily driven by cost-cutting measures and the increasing demand for its AI-optimized servers. This optimistic outlook has caused the company’s shares to rise by 3% during extended trading hours. Dell’s AI servers, integrated with Nvidia’s high-powered chips, are specifically engineered to efficiently handle the intensive computational requirements for training large language models, such as those empowering chatbots like ChatGPT. Consequently, there has been a surge in demand for Dell’s products, as well as for its competitors like Super Micro Computer, within the fiercely competitive AI server market.
Jeff Clarke, Dell’s Chief Operating Officer, announced, “The agreements we have finalized with xAI and other partners have led to our AI server backlog reaching approximately $9 billion as of today.” Dell finds itself in competition with PC manufacturers like HP Inc., particularly during a time when the wide-reaching U.S. trade tariffs on China have the potential to impact companies through potential price hikes on technology products. Dell mentioned that it is closely monitoring the tariff executive orders and subsequent governmental announcements to gauge any potential implications on its customers, clarifying that these developments have not yet influenced the company’s pricing strategies.
For the fiscal year 2026, Dell is projecting an adjusted profit of $9.30 per share, exceeding the average analyst estimate of $9.23, as per data compiled by LSEG. The company’s anticipated annual revenue midpoint of $103 billion aligns with industry estimates. In addition to these projections, Dell has announced an 18% rise in its yearly cash dividend and a $10 billion increment in its share repurchase authorization.
Despite a revenue of $23.93 billion for the fourth quarter ending on January 31, falling short of the estimated $24.56 billion, Dell reported an adjusted profit per share of $2.68, surpassing the predicted $2.53. Notably, the revenue from Dell’s infrastructure solutions group, encompassing its storage, software, and server offerings, increased by 22% to reach $11.35 billion. Meanwhile, the revenue from the client solutions group, which includes PCs, saw a 1% rise, amounting to $11.88 billion.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Shounak Dasgupta)
