Dell misses on revenue, offers strong forecast driven by AI sales

Core Insights - Dell reported fiscal third-quarter earnings that fell short of Wall Street revenue expectations but forecasted a stronger fourth quarter driven by increased AI sales [1][2] - The company expects fourth-quarter sales of approximately $31.5 billion, exceeding analyst estimates of $27.59 billion, and anticipates earnings per share of $3.50 compared to the expected $3.21 [1][2] Financial Performance - Dell's net income for the quarter was $1.54 billion, or $2.28 per diluted share, compared to $1.17 billion, or $1.64 per diluted share in the same period last year [2] - Overall revenue increased by 11% year-over-year, with the data center business reporting $14.11 billion in sales, aligning with analyst estimates [3][5] AI and Infrastructure - The company raised its expectations for AI server shipments to $25 billion from $20 billion and increased its full-year revenue guidance to $111.7 billion from $107 billion [2] - Dell's AI systems primarily serve large businesses, governments, and neoclouds, with significant sales driven by $5.6 billion in AI server shipments [3][5] Segment Performance - The Infrastructure Solutions Group reported $10.1 billion in server and networking sales, a 37% increase year-over-year, while the Client Solutions Group, which includes laptops and PCs, reported $12.48 billion in sales, a 3% increase but below the expected $12.65 billion [5][6] - The laptop and PC segment experienced a 7% decline year-over-year [6] Shareholder Returns - The company allocated $1.6 billion during the quarter for share repurchases and dividends [6]