DBT Bureau
Bengaluru, 1 May
Dell Technologies’ shares fell more than 17% as the company was not able to meet the expectations of Wall Street coming from its AI-server business.
The American computer maker posted a first quarter revenue of $22 billion, up 6% over the same period last year. Its Infrastructure Solutions Group (ISG) revenue was at $9.2 billion, which was a rise of 22% year-on-year, with record servers and networking revenue of $5.5 billion, the company said in a statement. Its Client Solutions Group (CSG) revenue was at $12 billion, flat YoY basis.
“No company is better positioned than Dell to bring AI to the enterprise. Servers and networking hit record revenue in Q1, with our AI-optimized server orders increasing sequentially to $2.6 billion, shipments up more than 100% to $1.7 billion,” said Jeff Clarke, vice chairman and chief operating officer of Dell Technologies.
However, the market was not impressed with the growth numbers of AI servers as it was factoring in a higher upside. Currently, fast changes in the AI space with the advent of generative AI are driving enterprises to fetch computers with high-powered servers. Such demand builds investor expectations of higher sales of AI-powered computers.
Dell has already been showcasing its initiatives to integrate AI solutions in its computers. “The Dell AI Factory combines Dell infrastructure, solutions, and services optimized for AI workloads with an open ecosystem of partners including NVIDIA, Meta, Microsoft, and Hugging Face,” the company said.
Investors are betting big on AI-powered themes across the world. Earlier, Nvidia’s better-than-expected earnings have cheered investors. Its market cap touched a record $2.8 trillion in earlier trading sessions. On Friday, Nvidia’s share price dropped 1.5% as investors pulled out some investments from most technology stocks after a stellar run.
