By Emily Bary
Shipments of AI servers more than doubled sequentially to $1.7 billion
Dell Technologies Inc. blazed past expectations for its latest quarter as it continued to benefit from explosive artificial-intelligence demand, but the stock extended its pullback from record highs.
The company racked up record revenue in its servers and networking business during the fiscal first quarter, while AI-optimized server orders came in at $2.6 billion. Shipments of AI servers more than doubled sequentially to $1.7 billion, and Dell’s backlog for the category increased more than 30% to $3.8 billion.
Shares (DELL) dropped 9.3% in Thursday’s after-hours session. The stock had dropped 5.2% during the regular session, to snap a six-day win streak to a record close of $179.21 on Wednesday.
“No company is better positioned than Dell to bring AI to the enterprise,” Jeff Clarke, the company’s vice chairman, said in a release.
“We again demonstrated our ability to execute and deliver strong cash flow, with AI continuing to drive new growth,” Chief Financial Officer Yvonne McGill added.
Overall revenue amounted to $22.2 billion, up 6% from a year before, whereas analysts tracked by FactSet were modeling $21.7 billion.
Dell’s record $5.5 billion in servers and networking sales highlighted a big quarter of growth for the infrastructure solutions business. Servers and networking revenue increased 42%, while overall segment revenue rose to $9.2 billion, up 22%. That cleared Wall Street’s bar of $9.0 billion.
The client solutions group, which includes personal computers and displays, saw flat revenue of $12.0 billion, but that came in ahead of the $11.7 billion analysts had been modeling. Commercial client revenue rose 3% to $10.2 billion and exceeded the $9.7 billion consensus on the metric.
Dell has greater exposure to the commercial PC market than peers, which benefits average selling prices.
Overall net income increased 65% to $955 million, or $1.32 a share. On an adjusted basis, Dell posted $1.27 in earnings per share, matching what analysts were expecting.
-Emily Bary
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05-30-24 1611ET
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