(Reuters) -Dell Technologies beat Wall Street estimates for fourth-quarter revenue and profit on Thursday helped by demand for its AI servers, sending its shares up 19% in after hours trading.
The PC market is showing signs of green shoots following a slowdown in revenue that began in 2022 from the peaks touched during the pandemic, as the boom in work-from-home demand for PCs and electronics faded.
Dell is also a beneficiary of rising demand for its AI-servers that are equipped with chip designer Nvidia’s graphics processing units (GPUs), which helps in meeting the demands of high-performance computing.
“Our strong AI-optimized server momentum continues, with orders increasing nearly 40% sequentially and backlog nearly doubling, exiting our fiscal year at $2.9 billion,” Chief Operating Officer Jeff Clarke said in a statement.
Last week, Lenovo Group reported stronger-than-expected earnings in the third quarter, with revenue returning to growth after five quarters of decline.
The global PC market returned to 3% growth in the fourth quarter of 2023 and is now poised for a stronger recovery in 2024, data research firm Canalys said in January.
Dell posted revenue of $22.32 billion for the quarter ended Feb. 2, slightly ahead of analysts’ average estimates of $22.16 billion, according to LSEG data.
Excluding items, its fourth-quarter profit per share came in at $2.20, compared with estimates of $1.73.
Revenue at the infrastructure solutions group, which includes its storage, software and server offerings, fell about 6% to $9.33 billion, while that of the client solutions group – home to PCs – fell nearly 12% to $11.72 billion.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Shailesh Kuber)
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