Dell propelled by AI posts record growth and greatly boosts guidance
Dell Technologies reported quarterly results that significantly exceeded expectations, bolstered by surging demand for its AI-optimized servers. The group recorded its strongest revenue growth since returning to the public market in 2018, with sales up nearly 88% y-o-y to $43.84bn. Adjusted EPS reached $4.86, well above market estimates. Its shares jumped approximately 13% in after-hours trading on Wall Street.
The group's growth is primarily driven by servers equipped with Nvidia graphics processors for AI infrastructure. Dell said that revenue related to artificial intelligence servers surged 757% y-o-y to reach $16.1bn. The group now forecasts $60bn in AI-related revenue for the full fiscal year, up from its previous guidance of $50bn. The Infrastructure Solutions Group, which includes servers and data center equipment, saw its revenue leap 181% to $29bn.
Dell also greatly raised its annual outlook and now expects revenue of $165bn and $169bn, representing implicit growth of approximately 47%. Quarterly net income more than tripled to $3.44bn. The group is also benefiting from major government contracts, notably a recently announced 5-year, $9.7bn agreement with the Pentagon for Microsoft 365 services. The PC and client equipment division also grew by 17% thanks to the launch of new enterprise-focused computers.
Dell Technologies Inc. is the world's leading manufacturer of PC's. The activity is organized around 5 families of products and services:
- laptops;
- PC;
- software and peripheral devices: printers, screens, digital cameras, scanners, etc.;
- corporate equipment: servers, storage systems, switches, and work stations;
- services: consulting, deployment, training, technical support, etc.
Net sales break down by source of income between sales of products (79.6%), and sales of services (20.4%).
The United States account for 55.6% of net sales.
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