BENGALURU: Dell Technologies raised its full-year forecast for revenue and profit on Thursday (Aug 31), as it benefited from the artificial intelligence (AI) boom and stabilising demand for computer hardware and server products after a months-long slump.
Shares of the Round Rock, Texas-based company rose 8% in extended trading.
The results are the latest sign that a downturn in tech spending could be drawing to a close after major networking equipment provider Cisco also beat quarterly revenue estimates.
The company is expected to see a demand boost for its PowerEdge servers and generative AI designs with Nvidia from rising investments in artificial intelligence by Big Tech companies.
“AI is already showing it’s a long-term tailwind, with continued demand growth across our portfolio,” COO Jeff Clarke said.
The company forecast third-quarter revenue between US$22.5 billion and US$23.5 billion (RM104.5 billion and RM109.1 billion) beating analysts’ estimates of US$21.67 billion, according to Refinitiv data. Dell expects earnings per share of US$1.45, plus or minus 10 cents compared with estimates of US$1.38.
For the full year, Dell now expects revenue between US$89.5 billion and US$91.5 billion, and earnings per share of US$6.30, plus or minus 20 cents.
Dell reported second quarter revenue and EPS above analyst estimates.
The personal computer maker reported revenue of US$22.93 billion for the quarter ended Aug 4, compared with estimates of US$20.85 billion, according to Refinitiv data.
Servers and networking revenue for the second quarter came in at US$4.27 billion, up 11% from the first quarter, driven by higher demand for AI-optimised servers, Dell said.
Revenue at the company’s client solutions group (CSG) – home to its consumer and enterprise PC business – rose 8% from the first quarter to US$12.94 billion.
Gartner analyst Mikako Kitagawa said Dell keeping 7.5% of operating profits vs revenue (CSG) is impressive in this challenging market environment illustrating the company’s “profitability first approach”. – Reuters
