Dell again lifts annual forecasts as AI demand powers record results

By Jaspreet Singh

Sept 1 (Reuters) - Dell Technologies on Tuesday boosted its annual revenue forecast by $25 billion while also raising its profit outlook for the second time this year, driven by soaring demand for its AI servers.

Dell's shares rose 7% in extended trading.

The servers, equipped with Nvidia's chips, are sought by clients including AI cloud providers Nscale and CoreWeave to build computing clusters for training and running AI models.

Dell has also protected its margins from the effects of a memory chip shortage in the industry by hiking prices of its products including personal computers.

"Demand is broadening across neoclouds, sovereigns, and enterprise customers, and our customer count has surpassed 6,500," Chief Operating Officer Jeff Clarke said on a post-earnings call that was disrupted by a technical issue for about 10 minutes.

"Over the past 12 months, we have booked more than $130 billion in AI server orders," he said.

Nvidia's and Super Micro's forecasts last month had bolstered investor confidence in the resilience of the AI boom.

Dell raised its annual revenue outlook to $192 billion from $167 billion and adjusted earnings per share forecast to $25.50 from its earlier expectations of $17.90.

The company, whose shares have more than tripled this year, now expects fiscal 2027 revenue for AI-optimized servers to be $74 billion, up from its prior projection of $60 billion.

Its second-quarter revenue rose 58% to a record $47 billion, exceeding an LSEG-compiled estimate of $44.92 billion. Adjusted earnings of $7.04 per share topped estimates of $4.91.

Sales at Dell's PC segment rose 20%, driven by commercial clients, echoing growth at HP. Clarke said the PC unit's revenue is growing at its fastest rate in five years.

Revenue from Dell's unit that includes its storage, software and server offerings jumped 89%. Sales from traditional servers and networking more than doubled as customers upgraded infrastructure and demand rose for CPU-based servers handling agentic workloads.

(Reporting by Jaspreet Singh in Bengaluru; Editing by Sahal Muhammed)