Dell’s Second Quarter Revenue Boost Fueled by Increased Demand for AI Servers

Dell Technologies had a strong second quarter as sales of high-powered servers capable of handling AI workloads increased. For the period ended Aug. 2, the hardware technology company brought in $25 billion in revenue, a 9% uptick. Dell expects revenue to fall between $24 billion and $25 billion for the current quarter, as reported by CNBC.

For Dell’s infrastructure solutions group, the business unit that includes servers, second-quarter sales came in at $11.6 billion, beating analysts’ projections of $10.4 billion. Revenue for the group was $7.7 billion, up 80%.

The company reported $3.2 billion in orders for its AI-optimized servers, which is more than the $2.6 billion the company saw in the previous quarter. Outstanding orders for the enhanced equipment were valued at $3.8 billion.

Earlier this year, Dell partnered with chip maker NVIDIA. The infusion of NVIDIA’s technology has helped Dell gain traction with mid-sized companies interested in new servers with AI capabilities.

“Our AI momentum accelerated in Q2, and we’ve seen an increase in the number of enterprise customers buying AI solutions each quarter,” said Dell COO Jeff Clarke in a statement.

While the market for AI-capable servers is growing, Dell’s computing segment is apparently dying. Revenue from its client solutions group hit $12.4 billion, a 4% drop compared to the same quarter last year. Even though sales of business computers remained flat, sales of PCs to consumers fell 22%.

Overall, the market demand for PCs has been declining for years, seeing its lowest point when global shipments declined nearly 29% in the beginning of 2023. However, stimulated by emerging AI technology, the need for upgraded computers is now on the upswing. Experts predict computers enhanced with AI will make up 43% of total shipments in 2025, increasing to 60% by 2027. Additionally, sales of new units will likely jump as Microsoft ends support for Windows 10 next year and consumers will be looking to replace aging computers bought near the start of the pandemic.