Dell Gets a Boost from AI Servers, Raises Profit Forecast
Hey, so get this: Dell just said they think they'll make more money this year! Why? Sounds like their fancy AI servers, the ones with those super powerful Nvidia chips, are selling like hotcakes. Pretty cool, right?
Speaking of those servers, big names like Elon Musk's AI company and another one called CoreWeave are using them. Dell's shares even went up a bit after the news. It's not all easy though for companies like Dell and Super Micro. While they're getting lots of orders for these AI servers, making them costs a bunch, and there's tough competition out there, which puts pressure on how much profit they can make.
Dell's Chief Operating Officer, Jeff Clarke, was really excited. He said they got a whopping $12.1 billion in orders for AI stuff just last quarter! That's more than they shipped all of last year. Apparently, they've got a backlog of $14.4 billion in orders waiting.
This news comes right after the U.S. Department of Energy announced they're making a new supercomputer called Doudna. Guess what? It's going to use Dell and Nvidia's top-notch tech to handle some seriously complicated computing tasks. That's a big deal!
So, Dell is now thinking their adjusted profit this year will be around $9.40 per share. That's up from their old guess of $9.30. They're still sticking to their original guess for how much money they'll make overall this year though. For the next three months, they expect to bring in between $28.5 billion and $29.5 billion. Most analysts only thought they'd make about $25.05 billion, so that's a nice surprise!
Also, their guess for adjusted profit next quarter, $2.25 per share, is higher than what experts thought too, which was $2.09. They actually did better than expected on money coming in last quarter, hitting $23.38 billion compared to the expected $23.14 billion. Their adjusted profit last quarter was a little less than expected though, at $1.55 per share versus the expected $1.69.
Someone who looks at stocks, Shreya Gheewala, mentioned that things like competitive prices, tariffs, and where they're selling things could make their profit margins a bit tighter in the near future. Still, their part of the business that deals with things like storage and servers went up 12% in money coming in. Their computer business went up 5%, which is neat too. Apparently, people aren't rushing to get new computers as fast these days, but it seems like more folks are getting Windows 11 PCs, including those cool AI ones, according to Jeff Clarke. What do you think about all this?
