Dell Doubles Profit Growth Targets on Soaring AI Server Demand
Dell Technologies has sharply raised its profit outlook for the next four years, fueled by surging demand for its AI-powered servers. The company nearly doubled its annual earnings growth target, projecting at least 15% annual growth in adjusted earnings per share, up from its earlier goal of around 8%.
The tech giant — which counts xAI, Elon Musk’s artificial intelligence startup, and CoreWeave among its major clients — also boosted its revenue growth forecast. Dell now expects compound annual revenue growth between 7% and 9%, compared to its previous range of 3% to 4%. Following the announcement, Dell’s shares climbed nearly 3% in early trading.
The ongoing AI boom continues to transform the company’s outlook. Demand for high-performance servers that power tools like ChatGPT has positioned Dell as one of the top beneficiaries of the generative AI revolution. Analysts say this strong growth trajectory could help ease investor concerns about competition and rising production costs in the AI server market.
Dell reaffirmed both its third-quarter and full-year forecasts and maintained its projection for $20 billion in AI server shipments for fiscal 2026. CEO Michael Dell said customers are “hungry for AI and the computing, storage, and networking capabilities we deliver to deploy intelligence at scale,” noting that the company is still in the early stages of AI adoption despite recent progress.
Looking deeper into its divisions, Dell expects 11% to 14% annual growth for its infrastructure solutions group, which covers servers, storage, and software — a significant jump from its earlier estimate of 6% to 8%. Meanwhile, its client solutions group, which includes personal computers, is projected to grow at a slower pace of 2% to 3% due to ongoing competition in the consumer market.
However, Dell could soon benefit from a new PC upgrade cycle as Microsoft prepares to end support for Windows 10, prompting many users and businesses to update their systems for better performance and security.
