Dell Technologies has raised its annual profit forecast, driven by record-breaking demand for AI servers. The company now expects adjusted earnings of $9.40 per share for fiscal 2025, up from $9.30, fueled by unprecedented orders for AI-optimized servers powered by Nvidia chips. This surge reflects enterprises’ urgent push to build advanced AI infrastructure.
In the first quarter alone, Dell secured $12.1 billion in AI server orders, exceeding shipments for the entire fiscal year and leaving a backlog of $14.4 billion. The company anticipates shipping about $7 billion worth of AI servers this quarter, more than doubling its previous record. Customers range from AI startups like Elon Musk’s xAI to cloud providers, signaling broad adoption beyond just tech giants.
Despite the strong demand, Dell faces margin pressures due to the high costs of Nvidia chips and fierce competition. The company expects gross margins to shrink by one percentage point this year. Meanwhile, the U.S. Department of Energy’s new supercomputer project, using Dell and Nvidia technology, highlights the strategic role of AI infrastructure in national innovation.
Dell’s first-quarter revenue topped expectations at $23.38 billion, with infrastructure solutions revenue up 12 percent. However, earnings per share fell slightly short of estimates, reflecting near-term margin challenges. Overall, Dell’s optimistic forecast underscores the booming AI hardware market and its critical role in powering the future of technology.
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