Dell Technologies on Thursday raised its full-year revenue and profit forecast as it took advantage of the artificial intelligence (AI) boom and stabilizing demand for computer hardware and server products after a months-long slump. Shares of the Round Rock, Texas-based company rose 8 percent during extended trading. The results are the latest sign that a decline in technology spending could be coming to an end after major networking equipment supplier Cisco also beat quarterly revenue expectations.
The company is expected to see a surge in demand for its PowerEdge servers and generative AI designs with Nvidia due to rising investment in Artificial Intelligence by Big Tech companies.
“AI is already showing it is a long-term tailwind, with demand continuing to grow in our portfolio,” said Chief Operating Officer Jeff Clarke.
The company forecast third quarter revenue of between $22.5 billion (roughly Rs. 1,86,025 crore) and $23.5 billion (roughly Rs. 1,94,251 crore). Refinitive data. Dell expects earnings per share of $1.45 (approximately Rs. 120), plus or minus 10 cents compared to estimates of $1.38 (approximately Rs. 114).
For the full year, Dell now expects revenue of between $89.5 billion (approximately Rs. 7,40,057 crore) and $91.5 billion (approximately Rs. 7,56,595 crore), and earnings per share of $6.30 (approximately Rs. . 521), plus or minus 20 cents.
Dell reported second-quarter revenue and earnings per share that beat analyst expectations.
Server and networking revenue for the second quarter was $4.27 billion (approximately Rs. 3,52,953 crore), up 11 percent from the first quarter, driven by increased demand for AI-optimized servers, Dell said .
Revenue at the company’s client solutions group (CSG) — home to its consumer and enterprise PC businesses — rose 8 percent from the first quarter to $12.94 billion (approximately Rs. 1,06,974 crore) .
Gartner analyst Mikako Kitagawa said the fact that Dell maintains 7.5 percent of operating profit versus sales (CSG) is impressive in this challenging market environment, illustrating the company’s “profitability first” approach.
The results contrast sharply with competitor HP, which cut its full-year forecast due to a slump in PC demand and weakness in China.
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