The PlayStation DualSense controller and PlayStation 5 console.
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Sony on Tuesday announced a price hike for its flagship PlayStation 5 console, even as the device enters its fourth year on the market.
The Japanese gaming giant said its suggested retail price for the PS5 is now 79,980 yen ($553), up 19% from the previous price. The hike will take effect from Sept. 2.
Sony cited a challenging external environment, including fluctuations in the global economy, as the reason for the price increase.
A Dell Technologies sign is seen in Round Rock, Texas, on June 2, 2023.
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Despite beating on its top and bottom lines, shares of Dell Technologies fell more than 5% Thursday in extended trading after giving third-quarter earnings per share guidance that below Wall Street’s expectations.
Here’s how the systems integrator did versus LSEG consensus estimates:
EPS: $2.32, adjusted vs. $2.30 estimated
Revenue: $29.78 billion vs. $29.17 billion estimated
Dell raised its full year outlook for revenue to be $107 billion at its midpoint and diluted earnings per share to $9.55 at the midpoint, topping Wall Street estimates of $104.6 billion and $9.38 per share.
However, Dell’s guidance for third-quarter earnings per share of $2.45 came in short versus LSEG’s mark of $2.55, despite Dell’s guide for $27 billion in third-quarter revenue topping estimates of $26.1 billion.
Dell said that part of the reason its profit forecast is concentrated in the fourth quarter is due to seasonality, particularly in its storage business.
For the second quarter, overall revenue rose 19% on an annual basis. That was driven by the company’s Servers and Networking revenue, including AI servers, which came in at $12.9 billion, which was up 69% on an annual basis.
Dell is one of Nvidia’s key customers. Dell buys chips from the AI leader and builds computers around them, which it sells to end-users such as CoreWeave, a cloud service. Dell said it shipped $10 billion in AI servers in its past two quarters.
Dell said that it now plans to ship $20 billion of artificial intelligence servers in its fiscal 2026, double what it sold last year.
However, the company’s storage revenue declined 3% to $3.86 billion and missed a StreetAccount estimate of $4.1 billion in sales.
Revenue in the company’s client solutions group, which includes PC sales to enterprises, rose 1% on an annual basis to $12.5 billion. While it used to be Dell’s largest business group, in recent quarters it has grown much slowly than the company’s data center business.
Dell said it spent $1.3 billion on share repurchases and dividends during the quarter.
Two Nvidia customers made up 39% of Nvidia’s revenue in its July quarter, the company revealed in a financial filing on Wednesday, raising concerns about the concentration of the chipmaker’s clientele.
“Customer A” made up 23% of total revenue, and “Customer B” comprised 16% of total revenue, according to the company’s second-quarter filing with the Securities and Exchange Commission.
That’s higher than the same quarter a year ago when Nvidia’s top two customers made up 14% and 11% of sales, according to the filing.
The company regularly publishes information on a quarterly basis about its top customers, but the disclosure this week is fueling a renewed debate about whether Nvidia’s explosive growth is being driven by a handful of large cloud providers such as Microsoft, Amazon, Google and Oracle.
Nvidia finance chief Colette Kress said in a Wednesday statement that “large cloud service providers” made up about 50% of the company’s data center revenue. That’s important as the data center business made up 88% of Nvidia’s overall revenue in the second quarter.
“We have experienced periods where we receive a significant amount of our revenue from a limited number of customers, and this trend may continue,” Nvidia wrote in the filing.
Increasingly, analysts are looking to those cloud capital expenditure spending commitments to model the future growth of Nvidia.
“We see limited room for further earnings upside revision or share price catalyst in the near-term unless we have increasing clarity over upside in 2026 [cloud service provider] capex expectations,” wrote HSBC analyst Frank Lee in a note on Thursday. He has a hold rating on the stock.
But Nvidia’s Customer A and Customer B are not necessarily cloud providers. It’s a bit of a mystery, and an Nvidia representative declined to share the identities of Customer A and Customer B.
In its filing, Nvidia says it has both “direct customers” and “indirect customers.” Customer A and Customer B are listed as “direct customers.”
Direct customers are not the end users of Nvidia’s chips. They’re companies that buy the chips to build into complete systems or circuit boards that they then sell to data centers, cloud providers and end-users. Some of these direct customers are original design manufacturers or original equipment manufacturers like Foxconn or Quanta. Others are distributors or system integrators like Dell.
Indirect customers, meanwhile, include cloud service providers, internet companies and enterprises, which typically buy systems from Nvidia’s direct customers. Nvidia says it can only estimate revenue to indirect customers based on purchase orders and internal sales data.
Deciphering if any of those cloud providers are Nvidia’s mystery customers is difficult, in part because the chipmaker has wiggle room in the definitions of its direct and indirect customers.
Nvidia, for example, wrote in the filing that some direct customers buy chips to build systems for their own use.
Additionally, Nvidia noted that two of its indirect customers each accounted for over 10% of its total revenue, primarily buying systems through Customers A and B.
Contributing further to the mystery of it all, Nvidia said that an “AI research and development company” contributed a “meaningful” amount of revenue through both direct and indirect customers.
Nvidia told investors on Wednesday that demand for the company’s AI systems remains high, not just among cloud providers, but among other kinds of customers, including enterprises buying systems for AI and “neoclouds,” which are companies that are taking on the biggest providers with services more tuned for AI. Nvidia also listed foreign governments, saying it would record $20 billion in revenue this year for “sovereign AI.” All of these product categories are contributing to Nvidia’s revenue growth, Kress told analysts on an earnings call.
Nvidia CEO Jensen Huang also said that the company has a new forecast of $3 to $4 trillion in AI infrastructure by the end of the decade. It said that it could take about 70% of the total cost of a $50 billion AI-focused data center, not just for its graphics processing units but for other chips it sells, too.
Huang told investors it was a sensible target for the next five years because of how much hyperscalers were spending and committing to spend — $600 billion this year, according to Huang. He also said new kinds of customers, such as enterprises or overseas cloud providers, were joining the build-out.
“As you know, the capex of just the top four hyperscalers has doubled in two years as the AI revolution went into full steam,” Huang said.
Intel CFO David Zinser said that the semiconductor giant received $5.7 billion from the U.S. government on Wednesday evening.
Zinsner acknowledged the investment on Thursday during an investor conference. The investment is part of the White House’s decision last Friday to take a 10% stake in the beleaguered computer chip company.
Zinser also signaled the possibility that Intel seeks outside investment for its foundry business.
The company reported better-than-expected second-quarter results on July 25, but its shares sank 8% due to concerns over the business of its foundry unit, which manufactures computer chips for other firms.
“There’s likely going to be some opportunity for outside investors in foundry, and that will probably be our second opportunity to raise cash to fund the growth on the foundry side,” Zinser said.
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White House press secretary Karoline Leavitt said Thursday that the Intel deal is still “being ironed out by the Department of Commerce.”
“The T’s are still being crossed, the I’s are still being dotted,” Leavitt said. “It’s very much still under discussion.”
Intel released a corporate filing on Monday in which it warned that the deal with the U.S. government could generate “adverse reactions” from investors, employees and others.
“There could be adverse reactions, immediately or over time, from investors, employees, customers, suppliers, other business or commercial partners, foreign governments or competitors,” the filing said. “There may also be litigation related to the transaction or otherwise and increased public or political scrutiny with respect to the Company.”