The so-called “magnificent seven” (Microsoft, Google, and others) are collectively willing to spend several hundred billion dollars this year on developing AI computing infrastructure, so the plans of server equipment suppliers are to some extent adjusted to the demand situation. Dell is planning to earn about $15 billion from deliveries of server equipment for AI this year.
Image source: Dell Technologies
Considering that Dell Technologies earned $10 billion in this area last fiscal year, we are talking about a 50% increase. In the last fiscal quarter, the company earned $23.9 billion instead of the $24.55 billion expected by investors, but the specific income per share exceeded expectations: $2.68 against $2.53. In the current quarter, Dell expects to earn between $22.5 and $23.5 billion, which is slightly lower than analysts expected ($23.59 billion). Specific income per share of $1.65 will also be lower than investors’ forecast ($1.76), if the corresponding figure is achieved by the end of the current quarter.
However, the revenue forecast for the entire current fiscal year roughly coincides with investors’ expectations. According to Dell’s management, the company will earn between $101 billion and $105 billion this fiscal year, which ends at the end of October. Earnings per share ($9.3) may exceed the amount expected by investors ($9.23).
Last quarter, Dell’s revenue growth by 7% to $23.9 billion was largely driven by increased server hardware shipments. In the infrastructure solutions segment, the company’s revenue increased by 22% to $11.35 billion. However, analysts expected $11.7 billion on average. At the end of the last quarter, Dell had a backlog of orders for servers for artificial intelligence systems totaling $9 billion. Elon Musk’s company alone placed an order for $5 billion, as reported earlier. Last quarter, Dell earned $2.1 billion in the AI server segment, which is below the expected $2.77 billion.
In the consumer segment, Dell’s revenue grew only 5% to $11.88 billion, as demand for notebooks was modest. For the entire past fiscal year, Dell’s revenue from PC sales in the corporate segment grew 5% to $10 billion. Overall, PC shipments in the fourth quarter provided Dell with revenue of $11.9 billion, which corresponds to growth of 1%, but in the consumer segment, core revenue fell 12% to $1.9 billion.