Dell Projects Yearly Revenue of Up to $91.5 Billion Due to AI Boom and Recovering PC Demand

Dell Technologies upped its full-year sales and profit forecasts on Thursday, citing the artificial intelligence (AI) growth and stabilizing demand for computer hardware and server goods following a months-long decline. In extended trading, shares of the Round Rock, Texas-based corporation surged 8%. The numbers are the latest indication that the tech expenditure slump may be coming to an end, as major networking equipment company Cisco also surpassed quarterly revenue projections.

Rising investments in artificial intelligence by Big Tech firms are likely to enhance demand for the company's PowerEdge servers and generative AI designs with Nvidia.

"AI is already proving to be a long-term tailwind, with continued demand growth across our portfolio," stated Jeff Clarke, Chief Operating Officer.

According to Refinitiv data, the business anticipated third-quarter sales between $22.5 billion (approximately Rs. 1,86,025 crore) and $23.5 billion (about Rs. 1,94,251 crore), exceeding analysts' projections of $21.67 billion (roughly Rs. 1,79,129 crore). Dell anticipates profits per share of $1.45 (about Rs. 120), plus or minus 10 cents, compared to projections of $1.38 (approximately Rs. 114).

Dell now forecasts sales of $89.5 billion (approximately Rs. 7,40,057 crore) to $91.5 billion (about Rs. 7,56,595 crore) for the full year, with profits per share of $6.30 (nearly Rs. 521), plus or minus 20 cents.

Dell reported second-quarter sales and earnings per share that were higher than expected by analysts.

Dell said that server and networking revenue for the second quarter was $4.27 billion (approximately Rs. 3,52,953 crore), up 11% from the first quarter, due to increased demand for AI-optimized servers.

Revenue at the company's client solutions division (CSG), which houses its consumer and enterprise PC businesses, increased 8% year on year to $12.94 billion (approximately Rs. 1,06,974 crore).

According to Gartner analyst Mikako Kitagawa, Dell's retention of 7.5 percent of operational profits vs. sales (CSG) in this adverse market scenario demonstrates the company's "profitability first approach."

The results contrast sharply with competitor HP, which reduced its yearly projection owing to a drop in PC demand and weakness in China.