Dell Surpasses Expectations in Fourth Quarter with Strong Demand for AI Servers
Dell Technologies has surpassed expectations in the fourth quarter, driven by the demand for its AI servers. The PC market is showing signs of recovery after a slowdown in revenue in 2022. Dell's AI-optimised server momentum continues to grow, with a significant increase in orders and backlog.
Dell Technologies has exceeded Wall Street's expectations for both revenue and profit in the fourth quarter, thanks to the growing demand for its AI servers. This positive news has caused the company's shares to surge by 19% in after-hours trading.
After experiencing a slowdown in revenue in 2022 due to the waning demand for PCs and electronics as the work-from-home trend subsided, the PC market is now showing signs of recovery. Dell has been able to capitalise on this by meeting the rising demand for its AI servers, which are equipped with Nvidia's graphics processing units (GPUs) for high-performance computing.
Chief Operating Officer Jeff Clarke expressed his satisfaction with the company's performance, stating, "Our strong AI-optimised server momentum continues, with orders increasing nearly 40% sequentially and backlog nearly doubling, exiting our fiscal year at $2.9 billion."
This positive trend in the PC market is not unique to Dell. Last week, Lenovo Group also reported better-than-expected earnings in the third quarter, with revenue returning to growth after five consecutive quarters of decline. According to data research firm Canalys, the global PC market experienced a 3% growth in the fourth quarter of 2023 and is expected to have an even stronger recovery in 2024.
In terms of financials, Dell posted revenue of $22.32 billion for the quarter ended February 2, slightly surpassing analysts' average estimates of $22.16 billion. Additionally, the company's fourth-quarter profit per share came in at $2.20, exceeding the estimated $1.73.
However, not all segments of Dell's business saw growth. The infrastructure solutions group, which includes storage, software, and server offerings, experienced a decline of approximately 6% in revenue, amounting to $9.33 billion. Similarly, the client solutions group, which encompasses PCs, saw a decrease of nearly 12% in revenue, totaling $11.72 billion.
Despite these challenges, Dell's strong performance in the AI server market and the overall recovery of the PC industry bode well for the company's future prospects.
Dell Technologies has surpassed expectations in the fourth quarter, driven by the demand for its AI servers.
The PC market is showing signs of recovery after a slowdown in revenue in 2022.
Dell's AI-optimised server momentum continues to grow, with a significant increase in orders and backlog.
Source: REUTERS