Our website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

Dell raises full-year forecasts on AI strength, demand recovery

by Uma Rajagopal
0 comments
2023 08 31T213425Z 2 LYNXMPEJ7U10D RTROPTP 4 USA STOCKS

Dell raises full-year forecasts on AI strength, demand recovery

By Zaheer Kachwala

(Reuters) – Dell Technologies raised its full-year forecast for revenue and profit on Thursday, as it benefited from 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% 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,” Chief Operating Officer Jeff Clarke said.

The company forecast third-quarter revenue between $22.5 billion and $23.5 billion beating analysts’ estimates of $21.67 billion, according to Refinitiv data. Dell expects earnings per share of $1.45, plus or minus 10 cents compared with estimates of $1.38.

For the full year, Dell now expects revenue between $89.5 billion and $91.5 billion, and earnings per share of $6.30, plus or minus 20 cents.

Dell reported second quarter revenue and EPS above analyst estimates.

Servers and networking revenue for the second quarter came in at $4.27 billion, up 11% from the first quarter, driven by higher demand for AI-optimized 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 $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.”

The results are in sharp contrast with rival HP Inc which cut its annual forecast due to a slump in PC demand and weakness in China.

 

(This story has been refiled to say ‘contrast,’ not ‘contract,’ in paragraph 12)

 

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Shailesh Kuber)

 

Recent Post