MW Dell sees its backlog swell as big AI deals come through

By Emily Bary

The company is expanding beyond large cloud providers with its AI-server business

Dell Technologies Inc. is seeing its backlog swell thanks to new deals with xAI, Elon Musk's artificial-intelligence company, and other AI players.

While Dell $(DELL)$ ended its fiscal year with a $4.1 billion backlog for AI servers, its backlog is now at $9 billion, and the company is aiming to ship $15 billion in AI servers this year.

"Our prospects for AI are strong, as we extend AI from the largest cloud-service providers, into the enterprise at-scale, and out to the edge with the PC," Chief Operating Officer Jeff Clarke said in a release Thursday.

The company competes with Super Micro Computer Inc. $(SMCI)$ and Hewlett Packard Enterprise Co. $(HPE)$ in the red-hot market for AI servers. Dell's latest earnings report, which came out after Thursday's market close, indicated that Dell is executing its server business more profitably.

Dell's Infrastructure Solutions Group, which includes servers and storage products, posted an 18.1% operating margin for the fiscal fourth quarter, which compares with 15.3% in the same period a year before. The performance also contrasts with the 8.0% seen in the first quarter of the latest fiscal year.

Shares of Dell were up 4% in Thursday's after-hours trading.

The company delivered fourth-quarter adjusted earnings per share of $2.68 on revenue of $23.9 billion, while analysts tracked by FactSet were expecting $2.52 and $24.6 billion, respectively.

Dell offered guidance in its release calling for $1.65 in adjusted earnings per share and $22.5 billion to $23.5 billion in first-quarter revenue. The FactSet consensus was for $1.78 in adjusted EPS and $23.6 billion in revenue.

The company straddled the consensus view with its full-year revenue outlook, which calls for $101 billion to $105 billion, while analysts had been looking for $103.4 billion. Its adjusted EPS forecast is for $9.30, whereas analysts were expecting $9.26.

-Emily Bary

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February 27, 2025 16:33 ET (21:33 GMT)

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