Dell shares rise as demand for AI servers increases
Shares of Dell Tech rose more than 4% in pre-market trading on Wednesday, driven by higher-than-Fueled by rising demand for AI servers, which are often powered by Nvidia chips, Dell said it now expects fourth-quarter revenue of between $31 billion and $32 billion, compared with the $27.59 billion LSEG estimate cited by Reuters. Adjusted revenue is also expected to reach $3.50, exceeding the forecast of Dell also raised its annual financial targets. Revenue for fiscal year 2026 is now expected to reach between $111.2 billion and $112.2 billion, compared to previous guidance of $105 billion to $109 billion. Its adjusted earnings per share forecast was also raised to $9.92. Analysts at Morgan Stanley said the In a post-earnings call, Chief Operating Officer Jeff Clarke added that Dell would do "everything it can" to mitigate price increases following higher production costs. Investors have raised concerns that the company's profit margins could be squeezed by these expenses, as well as by increasing competition from rival server manufacturers like Super Micro.guidance$3.21.expected revenue and profit forecasts for the current quarter
Dell shares jump 6% despite lower-than-expected quarterly revenue
What’s happening:-
Shares of Dell Technologies gained in after-hours trading on Tuesday, following the release of the company’s third-quarter results.
What happened:-
The tech hardware provider posted better-than-expected quarterly earnings and raised its full-year forecast.
Dell was unable to meet market expectations for quarterly sales, which limited the gains in the stock.
How were the results:-
- The Round Rock, Texas-based company reported low double-digit sales growth for the quarter.
- Revenues surged 11% year-over-year to $27.01 billion but missed consensus estimates of $27.13 billion.
- Adjusted earnings came in at $2.59 per share, topping Wall Street expectations of $2.47 per share.
Dell's revenues and profits rise
Why it matters:-
Servers and Networking revenues jumped 37% year-over-year to $10.1 billion, while Commercial Client revenues rose 5% to $10.6 billion. Storage revenues fell 1% to $4 billion, while Consumer revenue declined 7% to $1.9 billion.
The company shipped servers worth $5.6 billion during the recent quarter. Its AI server backlog surged to $18.4 billion by the close of third quarter.
“AI momentum is accelerating in the second half of the year, leading to record AI server orders of $12.3 billion and an unprecedented $30 billion in orders year to date,” said COO Jeff Clarke.
Dell issued strong projections amid market concerns around its margins, following investment in production and stiff competition in the AI server market from rivals like Super Micro Computer.
Dell guided to revenues of $25 billion from AI server shipments for fiscal 2026, up from its previous outlook of $20 billion. Management also raised their full-year projections to $111.2-$112.2 billion, from their prior forecast of $105-$109 billion. They boosted the adjusted earnings forecast to $9.92 per share, from $9.55 per share.
Dell announced the appointment of David Kennedy as its new CFO
How shares responded: Dell’s shares rose 3% to $129.75 in extended trading hours on Tuesday following the release of quarterly results. The stock had been under pressure in the past month, losing around 22% in the period.
What to watch:-
Investors will keep an eye on the AI boom, which is expected to provide a significant boost to the company’s overall results ahead.