Last Thursday, August 29, Dell published information on the financial results of its operations in the second quarter of fiscal year 2025, which turned out to be more optimistic compared to the content of the preliminary forecasts of Wall Street analysts and became evidence of the company’s upward dynamic business related to servers.

The mentioned firm’s net revenue, headquartered in Round Rock, Texas, for the three-month period ended August 2, was fixed at $25.02 billion. This indicator showed an increase of 9% compared to the result for the second quarter of fiscal year 2024. It is worth noting that the LSEG consensus forecast provided that Dell’s revenue for the three-month period ended on August 2 would be fixed at $24.53 billion.

Adjusted earnings per share for the second quarter of fiscal year 2025 amounted to $1.89. At the same time, the LSEG consensus forecast provided that the corresponding indicator would be fixed at $1.71.

The company’s net income for the second quarter of fiscal year 2025 amounted to $841 million. This indicator increased by 85% compared to the result recorded for the same period last fiscal year.

Against the background of positive data on the company’s earnings, its shares demonstrate an upward dynamic. During extended trading, Dell’s securities rose by more than 3%.

It is worth noting that over time, the company’s shares have fallen slightly in price. This dynamic of securities was fixed after Dell announced its expectations regarding further financial performance. The company predicts that its revenue for the full year will range from $95.5 billion to $98.5 billion. The corresponding expectations exceed the previous version of the appropriate vision of the business prospects in terms of commercial performance. Dell initially told investors this year that it expected full-year revenue to range from $93.5 billion to $97.5 billion. It is worth noting that a year earlier, the corresponding figure was fixed at $88.4 billion.

Also on Thursday, Dell announced expectations that revenue in the current fiscal quarter will be between $24 billion and $25 billion. It is worth noting that the mentioned indicator corresponds to the StreetAccount forecast.

Currently, Dell’s growth is largely driven by its server-related business. Nowadays, the company is a leading supplier of corresponding products that can handle the high workloads generated during the operation of artificial intelligence systems, especially those based on Nvidia chips. Currently, there is a tendency for growing consumer demand for cloud provider services, which stimulates an increase in the need for servers.

This year, Nvidia chief executive officer Jensen Huang called out Dell founder Michael Dell as the person to contact to place orders for systems that include the company’s new chips.

Since the beginning of 2024, the value of Dell shares has shown an increase of 48%.

Infrastructure Solutions Group (ISG), part of the company’s ownership structure, generated revenue of $11.6 billion in the second quarter of fiscal year 2025. This indicator increased by 38% year-on-year.

The company’s revenue from activities related to servers and networking solutions for the second quarter of fiscal year 2025 was fixed at $7.7 billion. This indicator increased by 80% year-on-year. The corresponding result, as the company reports in its earnings report, is due to an increase in consumer demand for servers with artificial intelligence and corresponding products of the traditional category.

The company’s revenue from activities related to data storage systems for the second quarter of fiscal year 2025 was fixed at $4 billion. This indicator showed a decrease of 5% year-on-year.

Jeff Clarke, Dell’s vice chairman and chief operating officer, says that the momentum of artificial intelligence accelerated in the last fiscal quarter. Also in this context, he stated that there is a quarterly increase in the number of enterprise customers who buy AI solutions. According to him, in the second quarter of fiscal year 2025, the demand for servers optimized for artificial intelligence amounted to $3.2 billion in monetary terms. This indicator increased by 23% compared to the previous quarter. Since the beginning of the year, the demand for the mentioned servers in monetary terms has reached $5.8 billion. Jeff Clarke also stated that the backlog was $3.8 billion.

Dell’s Client Solutions Group (CSG) which includes personal computer sales delivered revenue of $12.4 billion in the second quarter of fiscal year 2025. This indicator decreased by 4% compared to the result a year ago. Commercial client revenue was fixed at $10.6 billion. This indicator did not show any changes. Consumer revenue was fixed at $1.9 billion. This indicator fell by 22% year-on-year.

Jeff Clarke says that Dell competes in all big deals related to artificial intelligence and wins significant deployments at scale. He made the corresponding statement during an earnings call with analysts.

Also on Thursday, Dell announced that $1 billion was spent on share repurchases and dividends in the last fiscal quarter.

Analysts at Bernstein wrote in their note that Dell’s overall positive result for the last fiscal quarter was provided exclusively by artificial intelligence servers. In this context, they noted weak revenue figures in such areas of the company’s activities as storage and the sale of personal computers. Analysts also said that 80% to 90% of Dell’s server customers appear to be tier 2 cloud services providers and new deal opportunities appear to be competitive bids against Super Micro Computer.

It is worth noting that the last year has been a period of recovery for the company, which can also be characterized by the entry of the trajectory of the history of the existence of the firm into the cycle of success. In this case, the so-called artificial intelligence boom has actually become a growth factor. The development and scaling of the use of machine intelligence systems contribute to the growth of consumer demand for computing power and the infrastructure that ensures their operation. In this case, the beneficiaries may be those companies that are ready and able to offer high-quality and powerful products of the appropriate category. Recently, there has been an increase in investor interest in Dell. The company found itself on a recovery trajectory and demonstrated the prospects for further growth due to its powerful artificial intelligence servers. It is also worth noting that the remaining segments of Dell’s business space are currently within a state of affairs that does not correspond to the symbolic concept of prosperity as a rapidly developing upward dynamic. At the same time, artificial intelligence as a kind of growth platform is promising. Currently, AI is actively developing and, with a high degree of probability, the corresponding tendency will remain in the long term. Nowadays, there is no brainchild of any company that could surpass artificial intelligence in the status of the dominant product in the present state of affairs in the technology sector. Moreover, AI has significant potential, which implies, among other things, the prospects that it will become a kind of independent cognitive system existing in a digital environment capable of independent development and in-depth exploration of the Universe as a space of existence of the matter of life in the global philosophical sense of this definition. To implement the appropriate technological evolution, a material infrastructure is needed, which includes, among other things, servers supplied by Dell. Large-scale horizons for the development of artificial intelligence generate a kind of favorable area of circumstances that contribute to the further growth of the company.

Jeff Clarke stated that small cloud providers are mainly engaged in business related to AI servers, but enterprises and governments are an emerging opportunity.

Returning to other segments of Dell’s activity space, it is worth noting that the financial performance of the personal computer business may potentially improve in the foreseeable future. Over the past two years, the market for relevant devices has seen a historic downturn. This state of affairs, which has become an objective reality for personal computer manufacturers, is largely because consumers bought large volumes of technology products in the appropriate category at the beginning of the coronavirus pandemic when many workflows were moved to a digital format and very often carried out by employees at home. This year, the PC market has shown signs of a gradual recovery. So far, the corresponding tendency is not reflected in Dell’s financial performance. At the same time, it should not be ruled out that in the short or medium term, the recovery of the personal computer market will become a growth factor for the company’s appropriate business. However, there is no guarantee that such a scenario of the impact of the global tendency on Dell will be realized. At the same time, the likelihood of a positive result is high, since the company is one of the largest players in the personal computer market.

In August, it was reported that Dell was cutting jobs. The company is taking the action as part of a reorganization of its sales teams, including a new group specializing in artificial intelligence products and services. Sales executives Bill Scannell and John Byrne wrote Monday in a memo to Dell employees that the firm is getting leaner. Also in this context, it was noted that the company is streamlining layers of management and prioritizing investment directions. It’s worth noting that so far, there is no accurate information about the scale of the company’s layoffs.

Artificial intelligence servers are likely to be a priority for Dell in the short and medium term. These products have already generated significant economic benefits for the company and are most probably to continue to show positive results. Dell will not abandon other areas of activity, but the logic of commercial thinking has actually determined the main vector of applying efforts.

As we have reported earlier, Dell Characterizes Servers as Main Growth Engine in AI Era.