Dell Technologies (DELL.US) Q4 Results Show Mixed Bag, AI Server Demand Outlook Remains Robust

On Friday morning, Beijing time, Dell Technologies (DELL.US) released its fourth-quarter earnings for fiscal 2025, which ended on January 31. The data showed that the company's Q4 revenue grew 7.2% year-on-year to US$23.9 billion, falling short of market expectations; adjusted EPS was US$2.68, topping market expectations.

The revenue of the infrastructure segment was US$11.4 billion, lower than the market's expectation of US$11.8 billion. Of this, US$2.1 billion came from AI servers, lower than the US$2.77 billion expected by Wall Street.

The revenue of the PC segment grew 1% to US$11.9 billion, of which the sales of consumer PCs fell 12%, while the sales of commercial PCs grew 5% to US$10 billion.

Over the past few quarters, the long-stagnant PC market has started to recover. Data from industry research firm IDC showed that PC shipments rose 1.8% in the fourth quarter of 2024.

Looking ahead, Dell expects its EPS to be about US$9.30 and revenue to be US$1010 billion to US$1050 billion in fiscal 2026, which ends in January 2026, excluding certain items. The market expects EPS to be US$9.24 and revenue to be US$1030 billion.

The demand for computing to run AI tools has driven the growth of high-performance server makers such as Dell, Super Micro Computer (SMCI.US) and Hewlett Packard Enterprise (HPE.US). Jeff Clarke, Dell's chief operating officer, said in a statement that Dell's backlog of AI servers jumped to US$9 billion at the end of the fourth quarter after deals with Elon Musk's xAI and other customers.

Dell expects its AI server revenue to reach US$15 billion in fiscal 2026, up about 50% from US$9.8 billion in fiscal 2025.

"We are well-positioned to capture growth opportunities in all areas of the business. As we extend our AI business from large cloud service providers to enterprises, and then to the PC edge, our AI outlook is very strong," Clarke said.

As of the time of writing, Dell's after-hours shares fell 1.84%, reversing earlier gains of 5%. The stock has fallen 6% so far this year.