Dell raises annual forecasts as AI boom continues to reward hardware vendors
Supply chain adjustments and shrewd management of the memory chip shortage help Dell capitalize on increased demand for AI
Dell Technologies has raised its annual revenue and profit expectations on the back of an increased demand for its AI-optimized servers.
Strong quarterly results mark Dell as one of the biggest winners of the AI boom and also highlight its management of the memory chip shortage, with strategic price increases and supply chain adjustments.
Dell reported its net income for the most recent quarter had more than tripled to $3.44 billion from $965 million compared to the same quarter of 2025. However, the tech giant also raised its prices in January, reflecting higher input costs due to the global memory shortage driven by the AI boom.
"We're repricing, it feels like, every day, and I'm sure our customers feel that pain," Jeff Clarke, Dell Technologies' vice chairman and COO, said on a conference call with analysts, according to CNBC. "Unfortunately, I don't see that changing, given the world that we're living in today, where you have an inflationary environment, whether it's fuel, whether it's raw materials, whether that's DRAM, whether that's NAND, CPUs. We are living in an inflationary environment that is changing at a rate that obviously we've never seen before ... and everything that we see suggests that continues."
As a result, Dell expects to see revenue from AI servers somewhere around $60 billion for fiscal 2027, according to Reuters. This is up from its previous expectation of $50 billion. Quarterly revenue from Dell's infrastructure solution group, which includes storage and server products and services, hit 181%, and PC sales also rose by 17%.
The revised expectations also come in the same week that Dell landed a $9.7 billion deal with the Pentagon to manage Microsoft licenses. This five-year deal will see Dell as the main contractor providing Microsoft 365, cloud subscriptions, and software licensing for Microsoft products to be used by the US defense agency and the US military.
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