Dell's AI Server Demand Boosts Profit Forecast
Okay, so check this out. Dell, you know, the computer guys? Well, their stock ticker is DELL.N, and guess what? They just bumped up how much money they think they'll make this year. Like, they totally raised their yearly profit goal! Why? Because people are really loving their computers that are made for AI stuff, and these things have those super powerful chips from Nvidia (their stock is NVDA.O).
Dell's computers are a big deal, used by places like Elon Musk's AI company, xAI, and another one called CoreWeave (that's CRWV.O). And after this news, Dell's shares went up, like 2% after hours! Dell and another company, Super Micro Computer (SMCI.O), are doing well 'cause everyone wants these special computers. But, making them costs a lot, and there's tons of competition, so it's a tough market.
Dell's Chief Operating Officer, Jeff Clarke, was pretty excited. He said they got $12.1 billion in orders for AI stuff just in the last few months! That's more than they shipped in a whole year before, so now they have a crazy $14.4 billion worth of unshipped orders waiting. That's a lot of zeros, right?
And here's something cool too! The U.S. Department of Energy just announced they're building a new supercomputer called Doudna. This thing will use special tech from Dell and Nvidia to do some seriously complicated computing. It's like, super-duper thinking machines!
Because of all this, Dell now thinks their adjusted profit for the year will be around $9.40 a share. Before, they thought it would be $9.30. So, not a huge jump, but hey, it's a step up! They also said their total money coming in (revenue) for the year should be about the same as they thought before.
For the next few months (that's like, their second quarter), they expect to bring in somewhere between $28.5 billion and $29.5 billion. Wall Street folks (analysts) thought it would be less, around $25.05 billion, according to LSEG numbers. Dell also thinks their adjusted profit for those few months will be about $2.25 a share, which is higher than what the analysts expected, they thought it would be $2.09.
Looking back at the first few months (their first quarter), Dell's revenue was $23.38 billion, which was more than the $23.14 billion people expected. But their adjusted profit for that time was $1.55 a share, and that was a little less than the $1.69 expected. So, a mixed bag there, I guess?
Someone named Shreya Gheewala, who's an analyst at CFRA Research, mentioned that maybe Dell's profit margins (how much they make after costs) might feel a bit squeezed soon. This could be because of how competitive prices are, also things like tariffs (extra taxes on imported stuff), and where people are buying from changing. It's a bit complicated, tbh.
Anyway, the part of Dell that sells things like storage and servers (they call it the infrastructure solutions group) saw their money go up by 12%. The part that sells regular computers (called the client solutions group) saw their money go up by 5%. Jeff Clarke also said that people aren't buying new computers as fast as they used to, but it looks like folks are starting to switch to Windows 11 PCs, including those cool AI powered ones. So, maybe things are picking up a little there?
