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Dell shares soar nearly 40% after raising full-year outlook, AI server revenue expected to reach $60 billion
Dell Technologies shares surged nearly 40% in premarket trading after the company raised its full-year outlook and projected AI server revenue of $60 billion next year. Strong demand for both AI and traditional CPU servers is driving broad-based growth.
Dell Technologies shares surged nearly 40 percent in premarket trading after the company delivered strong quarterly results and raised its full-year outlook. The company projected that AI server revenue would reach $60 billion next year, a figure that exceeded market expectations and sent the stock sharply higher.
The results demonstrated that Dell's growth is not limited to the AI segment alone. The company also reported that demand for traditional CPU-powered servers is accelerating, as enterprises undertake broad-based infrastructure upgrades. This combination of AI and conventional server demand helped justify what analysts described as sustainable, broad-based momentum.
The strong results from Dell lifted shares of peers across the server and infrastructure sector. HPE shares rose 5.5 percent in premarket trading, while Super Micro Computer also saw significant gains. The PC segment showed strength as well, with companies upgrading their fleets to take advantage of AI-capable hardware.
Despite the optimism, there were some cautionary signals. HPE warned that rising memory costs are starting to crimp profit margins, even as overall demand remains robust. While HPE's profit outlook came in ahead of consensus estimates, it fell short of the most bullish projections on Wall Street, suggesting that cost pressures may temper the upside for some hardware makers.
The Dell earnings report reinforces the narrative that AI infrastructure spending continues to accelerate across the technology sector. With hyperscale cloud providers increasing their capital expenditure and enterprises moving from pilot programmes to production deployment, the demand for servers and data centre hardware appears to be on a sustained upward trajectory, Bloomberg reported.