Dell rides a boom in AI servers to deliver an upbeat forecast

By Emily Bary

The server maker says it's broadening its AI business to include more from neocloud, sovereign and enterprise customers

Dell boosted its full-year revenue forecast on Tuesday.

Dell Technologies continues to see momentum in its artificial-intelligence business, signing $12.3 billion in orders during the latest quarter on the heels of a broadening book of business.

The maker of AI and traditional servers on Tuesday boosted its overall revenue outlook for the fiscal year that ends in January. The company now expects between $111.2 billion and $112.2 billion for the period, up from between $105 billion to $109 billion before.

"We have strong conviction in our AI business, supported by what we see in our backlog, the pipeline and ongoing customer discussions," Chief Financial Officer David Kennedy said in prepared remarks. "We've proven we can execute and deliver for our customers in this space."

While Dell (DELL) came in a bit shy of consensus revenue expectations for the latest quarter, it matched the midpoint of its outlook at $27 billion. And the company's current-quarter forecast of $31 billion to $32 billion came in ahead of the $27.6 billion that analysts tracked by FactSet were modeling.

Shares gained 3.2% in after-hours trading.

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Chief Operating Officer Jeff Clarke noted that Dell's AI server business is expanding further beyond big clouds, "with a mix of neocloud, sovereign and enterprise customers."

"Dell is winning in AI because of our unique ability to engineer bespoke high-performance solutions, rapidly deploy large, complex clusters and provide global support," he added in a release.

Also announced Tuesday was a new deal with data-center operator Iren (IREN), which will mark the first instance of an Nvidia GB300 NVL72 compute cluster in Canada, according to Dell.

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During the latest quarter, Dell generated $14.1 billion in revenue for its Infrastructure Solutions Group, which includes servers and storage products. Demand for traditional servers improved and storage business shifted more toward higher-margin offerings.

The overall unit logged 16% growth in operating income to $1.7 billion.

Within the company's Client Solutions Group, which includes personal computers, commercial-client revenue was up 5% to $10.6 billion while consumer revenue fell 7% to $1.9 billion.

The unit posted $748 million in operating income.

"Commercial profitability was stable, driven by steady pricing sequentially as customers prioritize richly configured, AI-ready devices," Kennedy said in his prepared remarks. "In consumer, profitability improved year over year and demand returned to growth."

-Emily Bary

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11-25-25 2019ET