(Reuters) -Dell Technologies beat Wall Street estimates for second-quarter revenue and profit on Thursday, driven by strong demand for its AI-powered servers amid a recovering personal computer market.
Shares of the Round Rock, Texas-based company rose 3.3% in extended trading.
Dell has capitalized on increasing demand for its AI servers, which are powered by Nvidia’s graphics processors. These servers are designed to meet the growing computing needs of AI systems, including training language models.
Revenue for the second-quarter ended Aug 2 rose about 9% to $25.03 billion, beating analysts’ average estimate of $24.14 billion, according to LSEG data.
The company reported adjusted profit per share of $1.89 per share, compared with estimates of $1.71 per share.
“AI-optimized server demand was $3.2 billion, up 23% sequentially, and $5.8 billion year to date. Backlog was $3.8 billion, and our pipeline has grown to several multiples of our backlog,” Chief Operating Officer Jeff Clarke said in a statement.
Dell’s revenue for the infrastructure solutions group, which includes its storage, software and server offerings, rose about 38% to a record $11.65 billion. In contrast, revenue for the client solutions group – home to PCs – fell about 4% to $12.41 billion.
Dell took a $328 million charge for workforce reductions in the second-quarter, CFO Yvonne Mcgill said.
The global PC market continued to recover in the second quarter, with total shipments rising 3.4% from a year earlier to 62.8 million units, according to research firm Canalys.
The results come after a Reuters exclusive report that said Dell is again exploring a possible sale of cybersecurity firm SecureWorks, following previous unsuccessful attempts to find a buyer.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Tasim Zahid)
