Dell’s Stock Rises on Crushing Earnings Beat Driven by AI Server Sales

Source: SiliconANGLE

Dell Chief Operating Officer Jeff Clarke said in a statement that the company’s AI momentum accelerated in the second quarter. “We’ve seen an increase in the number of enterprise customers buying AI solutions each quarter,” he added.

The company reported second-quarter earnings before certain costs such as stock compensation of $1.89 per share, blowing past the analysts’ consensus estimate of $1.71. Meanwhile, revenue increased by 9% from a year earlier, to $25.06 billion, ahead of the $24.53 billion analyst target.

Dell also revised its full-year revenue guidance, saying it now sees total sales of between $95.5 billion and $98.5 billion, up from an earlier forecast of $93.5 billion to $97.5 billion. The midpoint is still lower than the Street’s target of $96.34 billion, though. For the current quarter, Dell is looking for revenue of $24 billion to $25 billion, just a tad below the Street’s forecast of $24.6 billion.

The reason for Dell’s hot streak is that it has emerged as one of the top sellers of so-called AI servers that incorporate graphics processing units from Nvidia Corp. The company is seeing sky-high demand from enterprises and cloud computing infrastructure providers, as everyone is clamoring to get generative AI workloads up and running. Dell has benefited from Nvidia Chief Executive Jensen Huang’s comments earlier this year, when he said Dell founder Michael Dell is the best person to talk to for anyone looking to buy server systems that contain his company’s most powerful chips.

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