Prime Highlights

• Dell forecasts AI-optimized server revenue to grow 103% to $50 billion by fiscal 2027 amid strong demand for AI infrastructure.
• The company raised its annual dividend by 20% and added $10 billion to its share repurchase program, signaling confidence in future cash flows.

Key Facts

• Dell now serves over 4,000 AI server customers, including xAI and CoreWeave, with fourth-quarter infrastructure solutions revenue up 73% to $19.6 billion.
• Full-year revenue is projected at $138–142 billion, surpassing analyst estimates of $125.54 billion, with adjusted EPS expected at $12.90.

Background

Dell said it expects revenue from its artificial intelligence-optimized servers to more than double by fiscal 2027, as strong demand for AI infrastructure boosts growth. The company also increased its dividend and expanded its share repurchase program, sending its shares up 10% in extended trading.

Dell forecasts AI server revenue to grow 103% to about $50 billion in fiscal 2027. It now counts more than 4,000 AI server customers, including xAI and CoreWeave.

The company raised its annual dividend by 20% and added $10 billion to its share buyback program, signaling confidence in future cash flows.

Major technology companies such as Alphabet, Microsoft, Amazon and Meta are expected to spend at least $630 billion this year to build AI infrastructure. That spending is driving demand for servers and data center equipment from vendors like Dell and rival Super Micro Computer.

However, rising memory chip prices and U.S. trade regulations have pushed costs higher. Dell raised server prices on December 10 and increased PC prices on January 6 to offset those pressures. Chief Operating Officer Jeff Clarke said customers initially reacted with concern but later focused on securing supply amid tight chip availability.

Dell forecast full-year revenue between $138 billion and $142 billion, above analyst estimates of $125.54 billion. It expects annual adjusted earnings per share of $12.90, topping projections.

In the fourth quarter, Dell posted record revenue of $33.4 billion, beating estimates. Adjusted earnings per share reached $3.89. Revenue from its infrastructure solutions group surged 73% to $19.6 billion, while client solutions revenue rose 14% to $13.49 billion.

The company expects first-quarter revenue between $34.7 billion and $35.7 billion, with adjusted earnings per share of $2.90, both ahead of market expectations.