Dell forecasts $15 billion of AI server sales this year
Michael Dell, chairman and chief executive officer of Dell Inc., speaks during the Dell Technologies World conference in Las Vegas, Nevada, US, on Monday, May 20, 2024.
Bridget Bennett | Bloomberg | Getty Images
Dell reported fourth-quarter sales that fell short of analysts’ estimates but earnings topped Wall Street expectations.
Here’s how the hardware company did versus LSEG consensus estimates:
- Revenue: $23.9 billion, versus $24.55 billion estimated
- EPS: $2.68, adjusted, versus $2.53 estimated.
Dell shares are down less than 5% so far in 2025, but the company’s stock has more than doubled in the last two years due to soaring demand for artificial intelligence systems, often based around Nvidia graphics processing chips. Dell sells Nvidia-based servers to Elon Musk’s xAI, for example, and said it had $4.1 billion in backlogged AI server orders at the end of January.
Dell said it sold about $10 billion of AI-optimized servers in its fiscal 2025, and expects to sell about $15 billion in AI system sales in the current year.
Current quarter revenue will be between $22.5 and $23.5 billion, Dell said, trailing the average estimate of $23.59 billion, according to LSEG. The company guided for adjusted earnings per share during the quarter of $1.65, versus $1.76 estimated by analysts.
Dell expects between $101 billion and $105 billion of revenue in its fiscal 2026, about inline with LSEG estimates of $103.17 billion. Earnings per share for the full year will be $9.30, the company said, topping estimates of of $9.23
Net income increased to $1.53 billion, or $2.15 per share, from $1.21 billion, or $1.66 per share, in the year-ago period.
Dell raised its dividend by 18% and announced $10 billion in share repurchase authorization.
Revenue rose 7% in the fourth quarter, driven by the company’s Infrastructure Solutions Group, its server division, which saw sales rise 22% to $11.35 billion. That was under a StreetAccount estimate of $11.7 billion in sales.
Dell’s client solutions group, its biggest business, saw sales rise 5% to $11.88 billion, due to a sluggish laptop market. StreetAccount was expecting $11.98 billion in revenue.
Dell revealed on Thursday that it had discovered that some of its suppliers had given it credits that were not recorded or that were recorded at the wrong time. The impact was “not material,” Dell said, adding that it had restated prior financial statements in 2024 and 2025.
“The company initiated an investigation that indicated that the credits resulted from the actions of certain employees that support a limited number of suppliers, impacting the Client Solutions Group segment and overstating cost of goods sold by approximately $200 million in fiscal 2024 and $148 million in fiscal 2025 for the nine months ended November 1, 2024,” Dell said in its press release.
WATCH: Dell nears deal to sell $5 billion in AI servers to xAI
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