Dell's AI Servers Boosting Profits and Stock
Dell's AI Servers Are Hot Right Now, and It's Good News for the Stock
So, get this! Dell just upped its game, raising its yearly profit guess. Why? Turns out, their AI-powered servers are selling like hotcakes. These things are packed with super powerful chips from Nvidia, who's also a big deal.
Companies like Elon Musk's AI startup, xAI, and CoreWeave are snapping up these servers. Dell's shares even went up a bit after hours, which is pretty cool, right? Dell and another company called Super Micro Computer have been doing well because of the demand for these servers. But, you know, making them costs a lot, and there's tons of competition, so profits can be a bit tight sometimes.
Dell's Chief Operating Officer, Jeff Clarke, said they got a massive $12.1 billion worth of AI orders just in the last few months! That's more than they shipped in all of their last fiscal year. They still have a bunch to deliver, about $14.4 billion worth. That's wild!
What's more, the U.S. government announced they're building a new supercomputer called Doudna. This thing will use Dell and Nvidia's fancy tech to do some seriously complicated math. Dell now thinks they'll make about $9.40 per share in yearly profit, which is slightly better than the $9.30 they thought before. They also stuck to their original sales prediction for the year.
Looking ahead, Dell thinks they'll make between $28.5 billion and $29.5 billion in sales next quarter. That's way more than what the money experts were guessing, which was around $25.05 billion. Dell also expects to make about $2.25 per share next quarter, better than the experts' guess of $2.09.
In the first few months of the year, Dell actually beat the sales expectations, bringing in $23.38 billion instead of the expected $23.14 billion. But their profit per share, at $1.55, was a little bit less than the $1.69 experts thought they'd make.
Someone who looks at stocks, Shreya Gheewala, said that competition, tariffs, and where they sell their stuff might make their profit margins a bit squeezed in the near future. Sales for Dell's infrastructure stuff, like servers and storage, went up by 12%. And their computer business sales went up by 5%. Idk, maybe people aren't buying new computers as fast as they used to, but it seems more folks are getting those new Windows 11 PCs, which include the ones with AI built in, according to Jeff Clarke.
