Dell Boosts Profit Outlook on Strong AI Server Demand
So, Dell is totally crushing it right now! They just upped how much money they think they'll make this year. Why, you ask? Well, it's all about those cool servers they make that are super good at artificial intelligence stuff.
These servers use these really strong chips made by Nvidia. And guess what? Companies like Elon Musk's AI company, xAI, and CoreWeave are using Dell's servers. That's a pretty big deal! Because of all this good news, Dell's stock even went up a little bit after the market closed.
Now, Dell and another company called Super Micro Computer have been doing well because everyone wants these special servers. But man, they cost a lot to make, and there's tough competition out there, so making a ton of profit can be tricky.
Jeff Clarke, who's like a big boss at Dell, said they got a massive amount of orders for AI stuff just in the last few months. Like, $12.1 billion worth! That's more than they shipped out in a whole year before this! They still have a bunch of orders they need to fill too, like $14.4 billion worth. Wow!
And get this, right after that news came out, the U.S. government's energy department announced they're building a new super-duper computer called Doudna. And guess whose tech it's using? Yep, Dell and Nvidia's advanced stuff to do some seriously hard computing jobs.
Because things are looking so good, Dell now thinks they'll make about $9.40 per share this year. They thought it would be $9.30 before, so that's a nice little bump. They also said their total money coming in for the year should stay about the same as they thought before.
Looking ahead, they think they'll make between $28.5 billion and $29.5 billion in the next few months. Most analysts thought it would be closer to $25.05 billion, so that's way more than expected!
And their expected profit for that next few months is also higher than what analysts thought, at $2.25 per share instead of $2.09. In the first few months of the year, they actually made more money than expected, pulling in $23.38 billion instead of the predicted $23.14 billion. But their profit for that time was a little less than expected, at $1.55 per share compared to $1.69.
Someone who looks at companies a lot, Shreya Gheewala, mentioned that Dell might have a bit of a tough time with making as much profit in the near future. She said things like companies charging less because of competition, taxes on imports, and selling to different places could cause some pressure.
On the bright side, the part of Dell that handles storage and servers and stuff saw their money go up by 12%. The part that sells PCs, though, only went up by 5%. People aren't buying new PCs as fast as they used to, but Jeff Clarke did say that people are starting to get new PCs with Windows 11, including those cool AI PCs. So, maybe that part of the business will pick up too?
