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Dell tops estimates on boost from AI-led server demand, shares jump premarket

February 29, 2024 5:02 PM EST
(Updated - March 1, 2024 4:47 AM EST)

Investing.com -- Dell Technologies (NYSE: DELL) reported fourth-quarter results that topped Wall Street as solid demand for its artificial intelligence-optimized servers offset weakness in personal computing.

Shares in the tech group rose sharply in premarket U.S. trading on Friday.

For the three months ended Feb. 2, the company posted adjusted per-share earnings of $2.20 on revenue of $22.32 billion, compared with estimates for $1.73 per share and $22.16B, respectively.

The infrastructure solutions group business, which includes the AI-optimized servers, saw revenue jump 10% sequentially to $9.33B thanks to a strong demand environment for the nascent technology.

"Our strong AI-optimized server momentum continues, with orders increasing nearly 40% sequentially and backlog nearly doubling, exiting our fiscal year at $2.9 billion," the company said.

The client solutions group, which includes Dell's PC business, reported a 12% decline in revenue to $11.72B year-on-year in the fourth quarter.

Texas-based Dell also hiked its annual dividend by 20% to $1.78 a share.

In prepared remarks, Chief Operating Officer Jeff Clarke said there were "positive signs" for the business as it exited its 2024 fiscal year, although he flagged that large enterprise customers remained "cautious" with their spending during a time of high inflation and elevated interest rates.


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