Street View: AI server demand to support Dell's growth

ReutersAug 29, 2025 12:03 PM

Dell DELL.N raised its annual revenue and profit forecasts on Thursday, buoyed by demand for its artificial intelligence-optimized servers that are powered by Nvidia's NVDA.O advanced chips

Company forecast third-quarter adjusted profit of $2.45, below analysts' estimate of $2.55 -LSEG data

Shares down 6.3% at $125.66 premarket

TRADITIONAL SERVER BUSINESS IN FOCUS

Melius Research ("buy," PT: $172) says Dell's AI server demand should benefit each quarter from the increased availability of Nvidia's Blackwell GB300 systems

J.P.Morgan ("overweight," PT: $145) says upside from co's AI server revenue is helping neutralize weakness in the traditional infrastructure demand

TD Cowen ("hold," PT: $130) says sales of traditional server units may be flat in FY26 as "upgrade demand globally is offset by slower US government spending"

Barclays ("equal weight," PT: $131) says concerns that the AI server market could become more competitive persist and may lead to some of Dell's larger customers to branch out

Morgan Stanley ("overweight," PT: $144) notes "if DELL can improve execution in US large enterprise and the overall PC business, then the story should get cleaner from here"

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