Dell's AI Servers are Booming!
Okay, so guess what? Dell just bumped up its yearly profit guess, and it sounds like their AI servers are flying off the shelves! Ya know, the ones packed with Nvidia's super-powerful chips. This is a big deal!
Shares of Dell went up like 2% after hours too. Apparently, big names like Elon Musk's AI company, xAI, and CoreWeave are using Dell's servers. That's pretty cool, right?
Dell and another company called Super Micro Computer are doing well because everyone wants these servers. But making them costs a lot of money, and there's tough competition, so that can make things a bit tight on profits.
Dell's Chief Operating Officer, Jeff Clarke, said they got a massive $12.1 billion in AI orders just in the last few months. That's more than they shipped in all of the last fiscal year! They've got $14.4 billion in orders waiting to go out the door.
Plus, the U.S. Department of Energy just announced they're building a new supercomputer called Doudna. And yup, it's gonna use Dell and Nvidia's fancy tech to do some really tough tasks.
Dell's now thinking their yearly profit will be around $9.40 per share, which is a bit higher than their old guess of $9.30. They're sticking to their yearly sales prediction though. For the next few months, they're expecting between $28.5 billion and $29.5 billion in sales, way more than what analysts thought they'd get ($25.05 billion).
Their profit guess for the next few months is also higher than expected ($2.25 vs $2.09). Even though their sales for the first few months were a bit better than expected ($23.38 billion vs $23.14 billion), their profit per share was a little less than what people thought ($1.55 vs $1.69).
Someone who keeps an eye on stocks, Shreya Gheewala, mentioned that competition, costs from tariffs, and where they're selling things might put some pressure on their profits in the near future.
Breaking down their business a bit, the part that sells servers, storage, and software saw sales go up by 12%. Their computer business also saw sales go up by 5%. Jeff Clarke also said that even though people aren't upgrading their PCs as fast as before, it looks like more folks are switching to Windows 11 PCs, which, you guessed it, includes those with AI features.
Wonder what this means for the future of AI tech? Idk, it's all happening so fast!
