Dell Raises Profit Forecast on AI Server Boom

Hey everyone, so guess what? Dell just gave a little nudge to their yearly profit guess. Like, they think they're gonna make a bit more money this year. This is apparently because people are really wanting their servers that do all the cool AI stuff, especially the ones with those super strong chips from Nvidia.

You know how Elon Musk has that AI company, xAI? And there's another one called CoreWeave? Yeah, they use Dell's servers. Anyway, Dell's shares went up a tiny bit after they shared the news. It's kinda wild how much demand there is for these servers right now, but making them costs a lot, and there's a lot of other companies trying to sell similar stuff, so that can make it tricky for them to make a ton of profit on each one.

Dell's Chief Operating Officer, Jeff Clarke, said they got a whopping $12.1 billion worth of AI server orders just this past few months! That's more than they shipped in their entire last fiscal year. And they've got $14.4 billion of orders waiting to go out. That's a lot of servers!

Oh, and speaking of cool stuff, the U.S. Department of Energy just said they're building a new supercomputer called Doudna. This thing is going to be a beast for doing really complicated computer tasks, and get this, it's gonna use fancy tech from both Dell and Nvidia.

So, because of all this, Dell now thinks their yearly profit will be around $9.40 per share. Before, they thought it would be about $9.30. They're sticking with their original guess for how much money they'll make overall for the year though.

For the next few months, they're guessing they'll make between $28.5 billion and $29.5 billion in revenue. That's actually more than what a bunch of analysts were expecting, like they thought it would be closer to $25.05 billion. And Dell's guess for their profit next quarter is also higher than what the experts predicted.

Now, in the first few months of the year, Dell's revenue was $23.38 billion, which was a bit more than expected. But their profit per share for that time was $1.55, which was a little less than what everyone thought it would be. So, a bit of a mixed bag there, idk why exactly.

Someone who looks at company stocks, Shreya Gheewala, said that maybe Dell's profit margins could feel a bit of pressure soon because of things like competitive prices, taxes on imported goods, and where they're selling their stuff. So, we'll see how that plays out.

Dell's part of the business that handles things like storage, software, and those servers everyone wants? That grew by 12%. And the part that sells computers? That grew by 5%. Jeff Clarke also mentioned that people aren't buying new computers as fast as they used to, but he sees signs that folks are starting to switch to Windows 11 computers, including the ones with AI built in. Maybe that'll pick up!