BENGALURU – Dell Technologies forecast annual revenue and profit above Wall Street estimates on Feb 29, betting on demand for its artificial intelligence (AI) servers and sending the company’s shares up more than 16 per cent in after-hours trading.

Dell is a beneficiary of rising demand for its AI servers that are equipped with chip designer Nvidia’s graphics processing units (GPUs), which help in meeting the demands of high-performance computing.

“Our strong AI-optimised server momentum continues, with orders increasing nearly 40 per cent sequentially and backlog nearly doubling, exiting our fiscal year at US$2.9 billion (S$3.9 billion),” chief operating officer Jeff Clarke said in a statement.

The PC market is also showing green shoots following a slowdown in revenue that began in 2022 from the peaks touched during the Covid-19 pandemic, as the boom in work-from-home demand for computers and electronics faded.

“We remain bullish on the coming PC refresh cycle and the longer-term impact of AI on the PC market,” chief financial officer Yvonne McGill said on a post-earnings call.

Last week, Lenovo Group reported strong quarterly earnings, with revenue returning to growth after five quarters of decline.

The global PC market returned to 3 per cent growth in the fourth quarter of 2023 and is now poised for a stronger recovery in 2024, data research firm Canalys said in January.

Dell expects fiscal year 2025 revenue to be between US$91 billion and US$95 billion, the midpoint of which is above analysts’ average estimate of US$92.07 billion, according to LSEG data.

It expects annual adjusted earnings per share of US$7.50, plus or minus 25 United States cents, compared with an estimate of US$7.15.

The company posted a revenue of US$22.32 billion for the quarter ended Feb 2, slightly ahead of estimates of US$22.16 billion. Excluding items, its profit per share came in at US$2.20 compared with estimates of US$1.73. REUTERS