By Tae Kim

Dell Technologies stock fell after the company posted worse-than-expected revenue for its October quarter late Tuesday.

For its fiscal third quarter, the company reported revenue of $24.4 billion, below the Wall Street consensus of $24.7 billion, according to FactSet. Adjusted earnings came in at $2.15 per share, above the $2.06 analysts' consensus estimate.

Dell also said AI server orders hit a record $3.6 billion in the third quarter and its pipeline grew by more than 50%. "AI is a robust opportunity for us with no signs of slowing down," Dell Technologies chief operating officer Jeff Clarke said in a press release.

Dell stock was down 13% to $123.70 in Wednesday's premarket following the report.

On an earnings conference call with analysts, Dell executives provided a revenue outlook range for the current quarter ending in January of $24 billion to $25 billion, below the current $25.6 billion consensus. The company said it was seeing some caution from customers for non-AI categories like its PC and storage businesses.

The company is a leading provider of computers and servers for artificial intelligence. Coreweave, a cloud-computing company that runs on graphics-processing units, and Elon Musk's xAI both recently said they are using Dell hardware for their latest AI infrastructure buildouts.

Last week, Dell executive Jeff Clarke said the company is the first to ship server racks based on Nvidia's GB200 NVL72 Blackwell system to enterprise customers. The NVL72, incorporating 72 GPUs, is Nvidia's latest AI hardware product. It's far more powerful than prior models, saving companies money on overall AI model training and queries.

Dell stock is up about 85% so far this year, compared to the 28% gain for the Nasdaq Composite.

Write to Tae Kim at tae.kim@barrons.com

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November 27, 2024 04:58 ET (09:58 GMT)

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