Dell Technologies has forecasted a robust annual profit, surpassing expectations due to strategic cost reductions and increased demand for its AI-optimized servers. These servers, equipped with advanced Nvidia chips, meet the high computational demands of training large language models such as those used in chatbots like ChatGPT. This has spurred interest from various companies, enhancing Dell’s competitive position in the AI server market alongside rivals like Super Micro Computer.
According to Chief Operating Officer Jeff Clarke, deals with xAI and other entities have increased the AI server backlog to approximately $9 billion. Dell is navigating a competitive landscape with other PC manufacturers, including HP Inc., especially given the potential impact of a new U.S. trade tariff on China, which could elevate tech product prices. The company is analyzing these tariff orders to determine their effects on customer pricing, which remain unaffected at this point.
For fiscal 2026, Dell predicts an adjusted profit of $9.30 per share, slightly above analyst estimates. The company’s projected annual revenue midpoint of $103 billion aligns with market expectations. Additionally, Dell announced an 18% increase in its annual cash dividend and expanded its share repurchase authorization by $10 billion.