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Dell Technologies Boosts Annual Forecasts Amid Strong AI Server Demand Fueled by Nvidia Chips

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Pooja Chauhan
Pooja Chauhan
Pooja Chauhan: Your Source for Entertainment and Box Office News Pooja Chauhan is a passionate writer and dedicated journalist specializing in delivering the latest updates and insights from the world of entertainment and box office. With a keen eye for detail and a deep love for cinema, Pooja brings her readers accurate and engaging coverage of all things related to movies, celebrities, and the dynamic world of showbiz. Her commitment to keeping her audience well-informed and entertained makes her a valuable voice in the realm of entertainment journalism. When she's not busy uncovering the latest scoops, Pooja enjoys exploring classic films and indulging in creative writing." Contact us: admin@bollywoodfever.co.in

Dell Technologies raises its annual revenue and profit forecasts, driven by surging demand for AI-optimized servers powered by Nvidia chips, despite struggles in its PC business.

Bollywood Fever: Dell Technologies has raised its annual revenue and profit forecasts, thanks to robust demand for its AI-optimized servers powered by Nvidia‘s cutting-edge chips. The company’s shares rose by about 3% in extended trading following the announcement on Thursday.

Dell’s Infrastructure Solutions Group, which includes Nvidia-powered servers, saw a 38% surge in revenue, reaching a record $11.65 billion in the second quarter. These servers are specifically designed to meet the intense computational demands of AI systems, such as training large language models.

Dell

Enterprise remains a significant opportunity for us, as many are still in the early stages of AI adoption,” said Chief Operating Officer Jeff Clarke during a post-earnings call. Clarke also highlighted an emerging opportunity in “sovereign AI,” leveraging Dell’s strong relationships with governments worldwide.

Nvidia recently noted that countries developing AI models in their native languages are increasingly turning to its chips, which are expected to contribute low double-digit billions to its revenue by January 2025. Nvidia CEO Jensen Huang praised the partnership with Dell earlier this year, emphasizing their role in helping businesses create “AI factories.”

Dell’s stock has seen a 45% increase this year, reflecting investor confidence in the company’s AI-driven growth. On Thursday, Dell adjusted its annual revenue outlook to a range of $95.5 billion to $98.5 billion, up from the previous forecast of $93.5 billion to $97.5 billion. The company also raised its annual adjusted profit per share forecast to $7.80, plus or minus 25 cents.

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The demand for Dell’s AI-optimized servers jumped by about 23% sequentially, reaching $3.2 billion in the second quarter. The backlog for these servers currently stands at $3.8 billion. “Our pipeline has grown to several multiples of our backlog,” Clarke noted.

For the second quarter, which ended on August 2, Dell reported a 9% increase in revenue, totaling $25.03 billion, surpassing analysts’ average estimate of $24.14 billion according to LSEG data. The company also reported an adjusted profit of $1.89 per share, beating the estimate of $1.71 per share.

While the AI server segment flourished, Dell’s PC business struggled, losing market share to competitors. Revenue from the Client Solutions Group, which includes PCs, fell by about 4% to $12.41 billion. Despite being the top vendor in the U.S. business market, Dell faced challenges as competitors gained ground, according to Gartner analyst Mikako Kitagawa.

In the second quarter, Dell took a $328 million charge related to workforce reductions. Additionally, Reuters reported that Dell is once again exploring the possibility of selling its cybersecurity firm, SecureWorks, after previous unsuccessful attempts to find a buyer.

As Dell continues to navigate the rapidly evolving technology landscape, its focus on AI and partnerships like the one with Nvidia position it for continued growth, even as it faces challenges in other segments.


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