Dell Technologies (NYSE: DELL) has projected its annual revenue and profit for fiscal year 2025 to exceed Wall Street predictions, driven by robust demand for its AI servers. The company’s optimistic outlook is based on the growing need for high-performance computing capabilities provided by AI servers, particularly those equipped with Nvidia’s graphics processing units (GPUs). This announcement resulted in a significant 16% increase in Dell’s shares during after-hours trading.
Dell’s strong performance in the AI server market is underscored by a nearly 40% sequential increase in orders and a backlog that nearly doubled, reaching $2.9 billion at the end of its fiscal year. Concurrently, the global PC market, which has seen a slowdown in revenue growth since 2022, is showing signs of recovery. This rebound is anticipated to continue, buoyed by an upcoming PC refresh cycle and the long-term impacts of AI on the PC market.
Why it matters: Dell’s forecast reflects the increasing importance of AI in driving demand for advanced computing infrastructure. The company’s success in the AI server market, highlighted by significant order growth and a substantial backlog, indicates a strong industry shift towards AI and high-performance computing.
- Dell’s positive forecast contrasts with the performance of some competitors, underscoring its successful strategy in capitalizing on AI server demand. This competitive edge could redefine market dynamics and influence future technological innovations and deployments.
- The surge in Dell’s shares following the announcement reflects heightened investor confidence in the company’s strategic direction and its ability to capitalize on emerging technological trends, particularly in AI.
- By focusing on AI servers, Dell not only addresses current demand but also sets the stage for future technological advancements.
Go Deeper -> Dell forecasts upbeat fiscal 2025 on AI server demand – Reuters
