Michael Dell at the Allen & Company Sun Valley Conference on July 12, 2024 in Sun Valley, Idaho.
David Grogan | CNBC
Dell reported quarterly results on Thursday that beat Wall Street expectations, powered by an 80% increase in server sales. The stock rose more than 2% in extended trading after rising more than 7% at one point.
Here’s how the company did for the fiscal second quarter vs. LSEG consensus estimates:
Revenue: $25.06 billion vs. $24.53 billion expected
EPS: $1.89 adjusted, vs. $1.71 expected
Net income climbed 85% to $841 million, or $1.17 per share, from $455 million, or 63 cents per share, in the year-ago period. Revenue increased about 9% from $22.93 billion a year ago.
The stock took a leg lower after Dell revised its full-year guidance to between $95.5 billion and $98.5 billion, a slight upward revision from the company’s previous forecast. Earlier this year, the company told investors to expect revenue between $93.5 billion and $97.5 billion for the full year, up from $88.4 billion in the prior year.
For the current quarter, Dell said it expected between $24 billion and $25 billion in revenue, in line with the StreetAccount estimate of $24.6 billion.
Dell has emerged as a top vendor for servers that can handle artificial intelligence workloads, especially those based around Nvidia chips, as demand skyrockets from cloud providers. Earlier this year, Nvidia CEO Jensen Huang called out Dell founder Michael Dell as the person to contact to place orders for systems that include the company’s new chips.
Dell shares are up 48% so far this year, but have slumped 34% since the company’s last report.
AI sales are in the company’s Infrastructure Solutions Group, which makes servers and systems for data centers. It’s the company’s fastest-growing unit. Overall ISG sales rose 38% to $11.65 billion, ahead of StreetAccount expectations of $10.44 billion.
The standout in Dell’s report was Servers and Networking revenue, which includes both AI-oriented servers based around GPUs from Nvidia and AMD, as well as more traditional servers for older applications. It’s part of ISG.
“We are competing in all of the big AI deals and are winning significant deployments at scale,” Jeff operating chief Jeff Clark said on a earnings call with analysts.
The unit reported $7.76 billion in sales, rising 80% on an annual basis, and beating StreetAccount expectations of $6.37 billion. Dell said $3.1 billion of that was AI server sales, up from $1.7 billion in the May quarter.
Clarke attributed the increase in revenue to server demand that continues to rise, and said that there was an increasing “backlog” of $3.8 billion in AI server orders that haven’t been fulfilled yet. There’s also a multibillion-dollar “pipeline” of AI server deals from enterprises and cloud providers that haven’t been finalized.
However, Dell’s storage business, also part of ISG, fell 5% to $4 billion in sales.
Dell’s Client Solutions Group, which focuses on PCs and laptops, declined 4% on an annual basis to $12.41 billion in revenue. Consumer sales fell 22% to $1.86 billion, and the company’s enterprise PC business was flat at $10.55 billion in sales.
Dell said that it spent $1 billion in the quarter on share repurchases and dividends.
Amazon logo on a brick building exterior, San Francisco, California, August 20, 2024.
Smith Collection | Gado | Archive Photos | Getty Images
Amazon representatives met with the House China committee in recent months to discuss lawmaker concerns over the company’s partnership with TikTok, CNBC confirmed.
A spokesperson for the House Select Committee on the Chinese Communist Party confirmed the meeting, which centered on a shopping deal between Amazon and TikTok announced in August. The agreement allows users of TikTok, owned by China’s ByteDance, to link their account with Amazon and make purchases from the site without leaving TikTok.
“The Select Committee conveyed to Amazon that it is dangerous and unwise for Amazon to partner with TikTok given the grave national security threat the app poses,” the spokesperson said. The parties met in September, according to Bloomberg, which first reported the news.
Representatives from Amazon and TikTok did not immediately respond to CNBC’s request for comment.
TikTok’s future viability in the U.S. is uncertain. In April, President Joe Biden signed a law that requires ByteDance to sell TikTok by Jan. 19. If TikTok fails to cut ties with its parent company, app stores and internet hosting services would be prohibited from offering the app.
President-elect Donald Trump could rescue TikTok from a potential U.S. ban. He promised on the campaign trail that he would “save” TikTok, and said in a March interview with CNBC’s “Squawk Box” that “there’s a lot of good and there’s a lot of bad” with the app.
In his first administration, Trump had tried to implement a TikTok ban. He changed his stance around the time he met with billionaire Jeff Yass. The Republican megadonor’s trading firm, Susquehanna International Group, owns a 15% stake in ByteDance, while Yass has a 7% stake in the company, NBC and CNBC reported in March.
— CNBC’s Jonathan Vanian contributed to this report.
A worker delivers Amazon packages in San Francisco on Oct. 24, 2024.
David Paul Morris | Bloomberg | Getty Images
Amazon on Thursday announced Prime members can access new fixed pricing for treatment of conditions like erectile dysfunction and men’s hair loss, its latest effort to compete with other direct-to-consumer marketplaces such as Hims & Hers Health and Ro.
Shares of Hims & Hers fell as much as 17% on Thursday, on pace for its worst day.
Amazon said in a blog post that Prime members can see the cost of a telehealth visit and their desired treatment before they decide to proceed with care for five common issues. Patients can access treatment for anti-aging skin care starting at $10 a month; motion sickness for $2 per use; erectile dysfunction at $19 a month; eyelash growth at $43 a month, and men’s hair loss for $16 a month by using Amazon’s savings benefit Prime Rx at checkout.
Amazon acquired primary care provider One Medical for roughly $3.9 billion in July 2022, and Thursday’s announcement builds on its existing pay-per-visit telehealth offering. Video visits through the service cost $49, and messaging visits cost $29 where available. Users can get treatment for more than 30 common conditions, including sinus infection and pink eye.
Medications filled through Amazon Pharmacy are eligible for discounted pricing and will be delivered to patients’ doors in standard Amazon packaging. Prime members will pay for the consultation and medication, but there are no additional fees, the blog post said.
Amazon has been trying to break into the lucrative health-care sector for years. The company launched its own online pharmacy in 2020 following its acquisition of PillPack in 2018. Amazon introduced, and later shuttered, a telehealth service called Amazon Care, as well as a line of health and wellness devices.
The company has also discontinued a secretive effort to develop an at-home fertility tracker, CNBC reported Wednesday.
Former U.S. Army intelligence analyst Chelsea Manning says censorship is still “a dominant threat,” advocating for a more decentralized internet to help better protect individuals online.
Her comments come amid ongoing tension linked to online safety rules, with some tech executives recently seeking to push back over content moderation concerns.
Speaking to CNBC’s Karen Tso at the Web Summit tech conference in Lisbon, Portugal, on Wednesday, Manning said that one way to ensure online privacy could be “decentralized identification,” which gives individuals the ability to control their own data.
“Censorship is a dominant threat. I think that it is a question of who’s doing the censoring, and what the purpose is — and also censorship in the 21st century is more about whether or not you’re boosted through like an algorithm, and how the fine-tuning of that seems to work,” Manning said.
“I think that social media and the monopolies of social media have sort of gotten us used to the fact that certain things that drive engagement will be attractive,” she added.
“One of the ways that we can sort of countervail that is to go back to the more decentralized and distribute the internet of the early ’90s, but make that available to more people.”
Nym Technologies Chief Security Officer Chelsea Manning at a press conference held with Nym Technologies CEO Harry Halpin in the Media Village to present NymVPN during the second day of Web Summit on November 13, 2024 in Lisbon, Portugal.
Asked how tech companies could make money in such a scenario, Manning said there would have to be “a better social contract” put in place to determine how information is shared and accessed.
“One of the things about distributed or decentralized identification is that through encryption you’re able to sort of check the box yourself, instead of having to depend on the company to provide you with a check box or an accept here, you’re making that decision from a technical perspective,” Manning said.
‘No longer secrecy versus transparency’
Manning, who works as a security consultant at Nym Technologies, a company that specializes in online privacy and security, was convicted of espionage and other charges at a court-martial in 2013 for leaking a trove of secret military files to online media publisher WikiLeaks.
She was sentenced to 35 years in prison, but was later released in 2017, when former U.S. President Barack Obama commuted her sentence.
Asked to what extent the environment has changed for whistleblowers today, Manning said, “We’re at an interesting time because information is everywhere. We have more information than ever.”
She added, “Countries and governments no longer seem to invest the same amount of time and effort in hiding information and keeping secrets. What countries seem to be doing now is they seem to be spending more time and energy spreading misinformation and disinformation.”
Manning said the challenge for whistleblowers now is to sort through the information to understand what is verifiable and authentic.
“It’s no longer secrecy versus transparency,” she added.