After-hours surge of over 13%! Dell Technologies, Inc. Class C (DELL.US) AI server demand explodes, performance guidance far exceeds expectations and ignites the market.

Thanks to strong demand for its artificial intelligence (AI) servers in the market, Dell Technologies, Inc. Class C technology (DELL.US) has released financial outlook far exceeding Wall Street expectations, driving its stock price to rise more than 13% in after-hours trading. The company's statement released on Thursday shows that Dell Technologies, Inc. Class C expects AI server revenue to reach around $50 billion in its current fiscal year ending January 2027, a year-over-year increase of 103%. Chief Operating Officer Jeff Clarke stated, "The opportunities brought by AI are reshaping our company." He revealed that as Dell Technologies, Inc. Class C enters the new fiscal year, "record backlog orders amounting to $43 billion demonstrate the strength of our engineering leadership and differentiated AI solutions winning in the market." Based on robust AI demand, Dell Technologies, Inc. Class C has provided optimistic overall forecasts for the 2027 fiscal year: annual revenue is expected to be between $138 billion and $142 billion, significantly higher than analyst forecasts of $125.54 billion; Adjusted earnings per share are expected to be $12.90, also higher than the expected $11.59. Meanwhile, the company announced a 20% increase in cash dividends and an additional authorization of a $10 billion share buyback plan. The latest fourth-quarter financial report has showcased the strong DRIVE of the AI business. The report shows that Dell Technologies, Inc. Class C fourth-quarter total revenue increased by 39% year-over-year to a record $33.4 billion, surpassing the market's expected $31.73 billion. Adjusted earnings per share were $3.89, exceeding the expected $3.53. Within this, the Infrastructure Solutions Group (ISG) revenue, which includes servers, storage, and software, soared by 73% to $19.6 billion, while the Client Solutions Group (CSG) revenue, covering personal computers (PC), grew by 14% to $13.49 billion. Dell Technologies, Inc. Class C stated that its AI server clients have exceeded 4,000, including Elon Musk's AI startup xAI and CoreWeave (CRWV.US) among others. Currently, large tech companies such as Alphabet Inc. Class C (GOOGL.US), Microsoft Corporation (MSFT.US), Amazon.com, Inc. (AMZN.US), and Meta (META.US) are planning substantial investments in AI infrastructure, providing continuous growth momentum for Dell Technologies, Inc. Class C and its competitors like Super Micro Computer, Inc. However, it is worth noting that despite the rapid growth of the AI server business, the soaring prices of storage chips have put pressure on its profit margins, as reflected in the performance of different departments. The financial report shows that the fourth-quarter operating profit margin for the server and networking business was 14.8%, higher than the expected 12.9%; while the PC business operating profit margin was 4.7%, lower than the analyst's expected 6.18%. Clarke pointed out in the statement, "Looking across the industry, the current market environment is full of high uncertainty, with unprecedented AI demand causing ongoing supply constraints and frequent price adjustments." This mainly refers to the issue of rising storage chip costs due to the large-scale construction of AI infrastructure. On one hand, this forces companies like Dell Technologies, Inc. Class C and HP Inc. (HPQ.US) to increase product prices to offset cost pressures, and on the other hand, it may also suppress demand for consumer electronics products globally, including PCs, smartphones, and gaming consoles. Previously, HP Inc. stated that its performance in the 2026 fiscal year is expected to be at the lower end of the previously forecast range. Lenovo (00992) also issued a warning, stating that pressure on PC shipments is increasing.