Dell Boosts Profit Forecast on Strong AI Server Demand
Hey, so get this! Dell, you know, the computer folks, totally bumped up how much money they think they'll make this year. It seems like people are really wanting their super cool servers that have Nvidia's powerful chips packed inside for AI stuff. Like, even Elon Musk's AI company, xAI, and another one called CoreWeave are using them. Their shares went up a bit because of it, which is neat.
Dell and this other company, Super Micro Computer, are doing well with these servers, but man, they cost a lot to make, and there's a ton of competition, so it's a bit tough on their profit margins. Dell's main guy, Jeff Clarke, was like, 'We got $12.1 billion in AI orders just this quarter! That's more than we shipped in all of last fiscal year!' They've got a whopping $14.4 billion lined up in orders that haven't shipped yet. Crazy, right?
This all comes right after the U.S. government's energy department said they are building a new supercomputer called Doudna. This thing will use Dell and Nvidia's fancy tech to do all sorts of complicated calculations. Pretty cool stuff!
So, Dell is now thinking they'll make about $9.40 per share this year, which is a bit more than the $9.30 they said before. They're keeping their estimate for how much money they'll bring in overall the same though. For the next few months (the second quarter), they're expecting between $28.5 billion and $29.5 billion in revenue, which is way more than what the money experts were guessing ($25.05 billion). They also think they'll make about $2.25 per share in profit next quarter, and the experts thought it would be $2.09.
Their revenue for the first part of the year came in a bit higher than expected too, $23.38 billion compared to $23.14 billion. But their profit per share for that time was a little less than expected, $1.55 versus $1.69. One expert, Shreya Gheewala, mentioned that things like getting more competitive with prices, tariffs, and where they're selling stuff might put some pressure on their profits for a bit. Idk, maybe it'll balance out?
Dell's part of the business that handles servers and software saw a 12% jump in revenue. Their section that deals with regular computers went up by 5%. Even though people aren't buying new computers as fast as they used to, it looks like folks are starting to move towards those Windows 11 PCs, including the ones that have AI features built in. It makes you wonder, how will these AI computers change how we work and play?
