published : 2023-09-05

Dell Technologies Soars on Raised Forecast Fueled by AI and Hardware Sales

Company Credits AI Boom and Computer Software Demand for Lifting Guidance

Dell Technologies CEO Michael Dell discussing the company's growth strategy during a conference. (Taken with Canon EOS 5D Mark IV)

Shares of Dell Technologies are skyrocketing on Friday after the company said it was lifting its full year forecast for revenue and profit amid an AI boom and steady demand for computer hardware and server products.

The results could signal a return to spending for the tech industry after major networking equipment provider Cisco also beat quarterly revenue estimates.

"AI is already showing it's a long-term tailwind, with continued demand growth across our portfolio," said Dell Technologies COO, Jeff Clarke.

A close-up of an AI-optimized server in a Dell data center. (Taken with Nikon D850)

The company forecasted third-quarter revenue between $22.5 billion and $23.5 billion, beating analysts' estimates of $21.67 billion, according to Refinitiv data.

For the full year, Dell expects revenue between $89.5 billion and $91.5 billion, and earnings per share of $6.30, plus or minus 20 cents.

Driven by higher demand for AI-optimized servers, Dell reported servers and networking revenue of $4.27 billion in the second quarter, up 11% from the previous quarter.

Tech industry professionals attending a conference on AI advancements and its impact on hardware sales. (Taken with Sony Alpha A7 III)

Meanwhile, revenue at the company's client solutions group jumped 8% to $12.94 billion from the first quarter.

At least 10 analysts raised their target prices for Dell's shares after the report, with Credit Suisse and Evercore ISI citing Dell's potential to benefit from AI.