Dell again lifts forecasts as AI demand powers record results

Dell again lifts forecasts as AI demand powers record results Sept 1 : Dell Technologies on Tuesday boosted its annual revenue and profit forecasts for the second time this year, driven by soaring demand for its AI servers from technology companies pouring billions into data centers. Shares of the Round Rock, Texas-based company rose about 6 per cent in extended trading. Dell, along with smaller rival Super Micro Computer, is a key supplier of AI-optimized servers that are used by AI cloud providers such as Nscale and CoreWeave for building computing clusters. Those servers are equipped with Nvidia's cutting-edge chips that provide the computing power essential for training and running AI models like OpenAI's ChatGPT. Nvidia's and Super Micro's strong forecasts last month had bolstered investor confidence in the resilience of the AI boom. S&P Global Ratings projected that AI infrastructure spending would surpass $1.3 trillion by 2027, signaling further demand for AI equipment makers. Dell, whose shares have more than tripled this year, now expects fiscal 2027 revenue for AI-optimized servers of $74 billion, up from its prior expectations of $60 billion. The company also raised its annual revenue outlook by $25 billion to $192 billion and adjusted earnings-per-share forecast to $25.50 from its earlier expectations of $17.90. Revenue for the second quarter was a record $47 billion, exceeding LSEG-compiled analysts' average estimate of $44.92 billion. Adjusted EPS of $7.04 also topped estimates of $4.91. "Our advantages reinforce one another, and throughout the quarter we used these strengths to drive growth, share gains, profitability and cash generation," said CFO David Kennedy. The company projected third-quarter revenue of $49 billion and adjusted EPS of $6.50, both above analysts' estimates of $41.42 billion and $4.48, respectively.