From CNBC: 2024-11-26 17:21:32

Dell Technologies forecasted lower fourth-quarter revenue and earnings compared to Wall Street expectations, despite strong AI sales growth. The PC maker’s quarterly earnings exceeded analyst expectations for earnings per share but fell short on overall revenue, with shares dropping 10% in after-hours trading. Net income rose 12% to $1.12 billion, with revenue up 10% to $24.4 billion from $22.25 billion last year.

For the fourth quarter, Dell expects revenue between $24 billion and $25 billion, below expectations of $25.57 billion, with adjusted earnings per share predicted at $2.50 versus expectations of $2.65. COO Jeff Clark mentioned that AI growth will not be linear due to changes in the silicon roadmap. Dell’s shares have increased by 86% in 2024.

Dell is a leading vendor for computer clusters necessary for AI development, competing against companies like Supermicro and HPE. Demand for Nvidia’s AI accelerators remains high, with Dell selling completed systems. Nvidia CEO Jensen Huang praised Dell for orders of its new Blackwell AI chips, causing a shift in demand to later quarters.

Dell reported strong growth in its Infrastructure Solutions Group, with revenue up 34% to $11.4 billion, driven mainly by AI sales. The Servers and Networking subsidiary, which includes AI systems, saw revenue increase by 58% to $7.4 billion. Dell shipped $2.9 billion in AI servers during the quarter, with $3.6 billion in future AI server orders.

The company noted increased demand for traditional servers due to AI server orders, leading to a boost in demand for less power-hungry servers. Dell’s computer storage systems increased by 4% to $4 billion, while the Client Solutions Group, selling PCs and laptops, saw a 1% decline to $12.1 billion. Commercial client PC sales rose 3%, while consumer PC sales dropped by 18%.



Read more at CNBC:: Dell earnings report Q3 2025