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Important points
- Dell shares soared after Dell’s fourth-quarter fiscal 2024 revenue beat expectations, driven by gains in its server division as demand for artificial intelligence (AI) soars.
- The company’s fourth-quarter revenue of $22.3 billion exceeded analyst expectations, but net income was $1.16 billion, slightly below expectations compiled by Visible Alpha.
- Dell’s Infrastructure Solutions group grew 10% from the previous quarter as orders for AI-optimized servers increased by nearly 40%.
- The company also increased its dividend by 20% to $1.78 per share in what Chief Financial Officer Yvonne McGill called “a sign of confidence in the business.”
- Analysts have suggested that the company could make significant AI gains through partnerships with chipmakers like Nvidia and AMD, as well as through its server business.
Dell Technologies (DELL)’s quarterly results highlighted the position Nvidia (NVDA)’s (NVDA) partners have to gain in the artificial intelligence (AI) boom. The stock price rose nearly 20%.
The company reported fiscal 2024 fourth-quarter revenue of $22.3 billion, down 11% year-over-year but above analyst estimates and the previous quarter. Dell’s Infrastructure Solutions Group grew 10% from last quarter as orders for AI-optimized servers increased by nearly 40%.
Dell’s net income for the quarter was $1.16 billion, up 89% from a year earlier, but slightly below expectations compiled by Visible Alpha. Earnings per share (EPS) also fell short of expectations at $1.59.
For the full year 2024, Dell posted revenue of $88.4 billion, beating analyst expectations. Full-year net income was $7.7 billion, well above expectations of $4.9 billion.
“The strong momentum in AI-optimized servers continues, with orders up nearly 40% sequentially and backlog nearly doubling, ending the fiscal year with $2.9 billion,” Dell said. CEO Jeff Clark said. He added that the company is “just beginning to address the AI opportunity ahead of us, and Dell is uniquely positioned with a broad portfolio to help customers build GenAI solutions that meet their performance, cost, and security requirements.” I believe there is,” he added.
The company also increased its dividend by 20% to $1.78 per share in what Chief Financial Officer Yvonne McGill called “a sign of confidence in the business.”
Dell could benefit significantly as AI technology advances through continued partnerships with AI leaders like Nvidia and AMD (AMD), and analysts believe Dell will benefit from upgrade cycles accelerated by AI-enabled PCs. It suggests that you may benefit.
Dell shares, which closed regular trading at a record high, rose 19.3% to $112.95 in after-hours trading. The stock price has more than doubled in the past year.
Updated—February 29, 2024: This article has been updated to include details on Dell’s dividend increase and stock price information.
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