Record AI system demand powers upbeat forecast despite earnings miss
Dell Technologies (NYSE:DELL) has raised its full-year profit outlook after receiving a record US$12.1bn in AI infrastructure orders during the first quarter, citing “unprecedented demand” for its AI-optimised servers. Shares rose in after-hours trading Thursday as the company also issued stronger-than-expected guidance for the current quarter.
While adjusted earnings per share (EPS) of US$1.55 fell short of LSEG’s US$1.69 consensus, revenue of US$23.38bn beat expectations and marked a 5% annual increase. Net income declined 3% to US$965m, though operating income rose 21% to US$1.17bn.
Dell now expects full-year adjusted EPS of US$9.40, up from its previous guidance of US$9.30. The company reaffirmed its full-year revenue forecast of US$103bn, but lifted its second-quarter revenue outlook to a range of US$28.5bn to US$29.5bn—well ahead of analysts’ estimates. It also expects second-quarter adjusted EPS of US$2.25.
Vice chairman and COO Jeff Clarke said Dell’s Infrastructure Solutions Group achieved “first-quarter record servers and networking revenue” of US$6.3bn, up 16% year-on-year. Overall revenue for the unit reached US$10.3bn, while operating income jumped 36% to nearly US$1bn.
Dell disclosed it has a US$14.4bn backlog of confirmed AI system orders, up from the US$12.1bn booked in the quarter. These systems, which are built around Nvidia GPUs and targeted at cloud providers like CoreWeave, carry higher margins than Dell’s traditional offerings. The company reiterated it expects to ship US$15bn in AI servers this fiscal year, up from US$10bn in FY25.
The Client Solutions Group, Dell’s PC business, reported revenue of US$12.5bn—up 5% from a year earlier—as the global PC market showed signs of recovery. Commercial sales grew 9%, offsetting a 19% drop in consumer revenue. Operating income for the segment fell 16% to US$653m.
Dell also stepped up capital returns, spending US$2.4bn on buybacks and dividends in the quarter—more than double its quarterly average since FY23. Cash flow from operations reached a record US$2.8bn.
