Dell Technologies (Dell) raised its annual revenue forecast by $25 billion on Tuesday, reaching $192 billion, thanks to the soaring demand for AI data center servers. This marks the company’s second upward revision of profit outlook this year. Consequently, Dell’s stock rose by 7% in after-hours trading.
Dell’s servers, equipped with Nvidia chips, have been highly favored by AI cloud service providers such as Nscale and CoreWeave. These servers are mainly used for training and running AI models’ computational clusters.
During the financial call, Chief Operating Officer Jeff Clarke stated, “The demand from emerging cloud, sovereign entities, and enterprise customers continues to expand, with our client base exceeding 6,500 companies. Over the past 12 months, we have received over $130 billion in AI server orders.”
AI business has become the largest growth engine for Dell this quarter. Dell’s financial report revealed that the amount of AI server orders reached a quarterly record high of $60.9 billion, totaling $95 billion by the end of the quarter.
Dell’s second-quarter revenue surged by 58%, hitting a record $47 billion, surpassing the London Stock Exchange Group’s expected $449.2 billion. Adjusted (non-GAAP) earnings per share were $7.04, a remarkable 203% increase year-over-year, exceeding the expected $4.91.
In addition to servers, Dell’s personal computer (PC) division experienced a sales growth of 20%, the fastest in five years, while the Infrastructure Solutions Group (including servers, networking, and storage) revenue skyrocketed by 89%.
With the increasing demand for customers to upgrade infrastructure and the rising need for CPU servers to handle AI workloads, Dell’s traditional server and networking business saw sales more than doubling.
Dell’s strong performance has led to a further increase in full-year revenue expectations. The company now predicts that its fiscal year revenue until January 2027 will be around $192 billion, $25 billion higher than the forecasted $167 billion in May, significantly surpassing the market’s expected $173.8 billion.
This marks Dell’s fifth consecutive quarter of providing full-year revenue guidance higher than market expectations. The substantial increase in performance targets indicates that server demand continues to grow rapidly as businesses continue to invest in AI infrastructure.
Dell also raised its adjusted earnings per share forecast from $17.90 to $25.50. With AI servers expected to contribute approximately $74 billion in revenue, higher than the previous estimate of $60 billion, this business segment is set to achieve significant growth compared to the previous fiscal year. Benefiting from the AI boom, Dell’s stock price has more than doubled this year.