Dell Technologies reported third-quarter earnings with revenue of $27.01 billion, slightly missing analyst estimates of $27.13 billion, but earnings per share of $2.59 beat the projected $2.47.
The company raised its AI server shipment forecast for fiscal 2026 to $25 billion, up from the previous $20 billion, and provided a strong Q4 revenue outlook of $31.5 billion, far exceeding the $27.59 billion consensus.
AI infrastructure drove optimism, with $5.6 billion in server shipments during Q3 and a backlog reaching $18.4 billion, fueled by $12.3 billion in new orders. Major customers include Elon Musk's xAI, CoreWeave, the U.S. Department of Energy, Abu Dhabi's G42, and a deal with Iren for Nvidia-based systems that Microsoft will rent.
However, margins faced pressure from rising memory chip costs, with Chief Operating Officer Jeff Clarke warning that DRAM and NAND prices are increasing at unprecedented rates. Despite this, Dell's stock rose 5% in after-hours trading.
The company appointed David Kennedy as permanent CFO and raised full-year revenue guidance to between $111.2 billion and $112.2 billion, up from prior expectations of $105 billion to $109 billion.
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