Dell raises growth targets for next four years on strong AI server demand

Core Insights - Dell has nearly doubled its annual profit growth target for the next four years, increasing expectations for adjusted earnings per share growth to at least 15% from around 8% due to strong demand for AI-related servers [1] - The company's shares rose nearly 3% following the announcement of compounded annual revenue growth expectations of 7% to 9%, up from a previous forecast of 3% to 4% [2] - Dell's strong profit growth outlook may alleviate investor concerns regarding competitive pressures in the AI server market and the high costs associated with product development [3] Revenue Growth Expectations - Dell anticipates long-term compounded annual revenue growth of 11% to 14% for its infrastructure solutions group, which includes storage, software, and server offerings, an increase from earlier expectations of 6% to 8% [4] - The company continues to project revenue growth of 2% to 3% for its client solutions group, which encompasses personal computers, amid strong competition in the consumer market [5] Market Dynamics - The demand for servers that support AI workloads, such as those used by services like ChatGPT, has positioned Dell as a significant beneficiary of the generative AI boom [2] - Dell raised its forecast for AI server shipments to $20 billion for fiscal 2026, indicating a strong market outlook [3]