Dell projected fourth-quarter revenue and earnings to surpass Wall Street expectations, attributing this to rising investments in data centers for artificial intelligence, which has heightened demand for its servers, resulting in a 4 percent increase in its shares during after-hours trading.

The firm additionally revealed the permanent designation of David Kennedy as its chief financial officer. Dell increased its yearly revenue and profit forecasts and provides AI-optimized servers featuring Nvidia’s advanced chips.

Its robust predictions arise amidst investor worries regarding margin strain from competition in the AI server market with competitors like Super Micro Computer and expensive manufacturing.

Dell has revised its forecast for fiscal 2026 revenue from AI server shipments to $25 billion, an increase from the previous estimate of $20 billion.

The backlog of the company's AI server reached $18.4 billion by the conclusion of the third quarter, driven by $12.3 billion in recent orders. It delivered servers valued at $5.6 billion during the quarter.

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After securing agreements with the U.S. Department of Energy and Abu Dhabi's AI company G42, the firm also lists Elon Musk's AI venture xAI and CoreWeave as its clients.

"We're in a truly extraordinary period." It’s unlike anything seen before. "We have not observed costs changing at the pace we've witnessed," Chief Operating Officer Jeff Clarke says.

Clarke mentioned that the pricing effect might reach the customer base, but Dell will strive to minimize that impact.

In a market with demand exceeding the available supply, firms like Dell can raise their prices.

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The efforts of Big Tech to expand AI infrastructure have led to rising prices for dynamic random access memory and NAND, two widely utilized types of memory chips, due to intense competition in the server market.

Melissa Otto, head of S&P Global Visible Alpha research, noted that Dell could take advantage of this potential pricing scenario.

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The firm anticipates fourth-quarter earnings to range from $31 billion to $32 billion, exceeding projections of $27.59 billion, as per data compiled by LSEG. Revised profit prediction of $3.50 per share was also higher than the estimates of $3.21.