Dell Technologies has raised its full-year revenue and profit forecasts after strong demand for artificial intelligence infrastructure drove record quarterly sales and a surge in orders.
The company’s shares rose nearly 10% in premarket trading on Wednesday following the stronger outlook, as customers continue to increase spending on data centres and computing systems needed to develop and run AI applications.
Dell reported $60 billion in orders during the quarter, while its backlog reached $95 billion, highlighting robust demand for infrastructure capable of supporting large language models and other AI systems.
AI cloud providers, including Nscale and CoreWeave, are among the customers using Dell servers equipped with advanced chips to build computing clusters for training and operating AI models.
Analysts at J.P. Morgan said Dell’s AI momentum remained strong, citing the company’s record orders and sizeable backlog as signs of sustained demand for AI infrastructure.
Dell also benefited from growth in its storage business. Analysts at Melius Research said the adoption of AI was supporting expansion in the company’s storage operations, one of its most profitable businesses.
The company raised its full-year revenue forecast to $192 billion from $167 billion and increased its adjusted earnings-per-share target to $25.50 from $17.90.
For the second quarter, Dell posted record revenue of $47 billion, representing a 58% increase from the same period a year earlier and exceeding Wall Street’s estimate of $44.92 billion.
The stronger-than-expected results also lifted shares of other AI infrastructure companies, with Super Micro Computer gaining 0.7% and Hewlett Packard Enterprise rising 5.4%.
If Dell’s shares maintain their gains at around $465, the company could add approximately $26 billion to its market value.
According to LSEG data, Dell was trading at 18.12 times expected earnings over the next 12 months, compared with 12.56 times for Hewlett Packard Enterprise and 8.06 times for Super Micro Computer.
Goodness Anunobi
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