Dell Technologies Expands AI Server Portfolio Amid Growing Demand
$DELL
Dell Technologies (NYSE:DELL), a prominent player in the computer and technology services sector, has recently made significant strides in its AI server portfolio. Known for its robust hardware solutions, the company has introduced its latest-generation servers, the PowerEdge R670 and R770 CSP Edition. These servers are designed to cater to a wide range of organizations, from large cloud service providers to small business owners and network edge operators. The new servers promise enhanced performance and efficiency, powered by the advanced Intel Xeon 6 Efficient core processor, delivering up to 2.3 times greater performance per rack compared to their predecessors. The new PowerEdge R670 and R770 CSP Edition servers are equipped with features like Smart Cooling technology and a compact form factor, which offer enhanced efficiency and simplified deployment and serviceability.
These attributes make them an ideal choice for specialized data centers. The company’s shares have seen a notable increase of 75.3% year to date, reflecting its commitment to meeting the evolving demands of its customers across various market sectors. Additionally, Dell has introduced the Data Centre-Modular Hardware System (DC-MHS) within the PowerEdge lineup, collaborating with industry leaders like Intel to standardize servers and enhance interoperability across data centers and edge environments. Dell has also been addressing the needs of smaller businesses and remote offices with the compact yet powerful Dell PowerEdge T160 and R260 servers. These servers, which include Intel Xeon E-2400 Processors, offer increased performance compared to previous generations.
The company is benefiting from strong demand for AI servers driven by ongoing digital transformation and heightened interest in generative AI applications. Its PowerEdge XE9680 AI-optimized server is particularly in demand. In the fourth quarter of fiscal 2024, Dell enhanced its generative AI solutions offerings to include support for the AMD Instinct MI300X accelerator in PowerEdge XE9680 servers and introduced the Dell Validated Design for Generative AI with AMD ROCm powered AI frameworks. Expanding its partner base has been a major growth driver for Dell. In March, the company announced an expanded collaboration with NVIDIA, launching the Dell AI Factory with NVIDIA, an end-to-end AI enterprise solution supported by high-quality data, new GPU models and professional services.
This initiative aims to accelerate business transformation through generative AI technologies. Additionally, Dell announced its partnership with Nokia to serve as its preferred infrastructure partner, transitioning Nokia AirFrame customers to Dell PowerEdge servers with Dell global services and support while also offering Nokia’s Digital Automation Cloud solution with Dell NativeEdge for enterprises. Over the past month, shares of this computer and technology services provider have returned +11.2%, compared to the Zacks S&P 500 composite’s +2% change. During this period, the Zacks Computers – IT Services industry, which Dell Technologies falls in, has lost 0.9%.
The company is expected to post earnings of $1.20 per share for the current quarter, representing a year-over-year change of -8.4%. The consensus earnings estimate of $7.64 for the current fiscal year indicates a year-over-year change of +7.2%. For the next fiscal year, the consensus earnings estimate of $9.05 indicates a change of +18.4% from what Dell Technologies is expected to report a year ago. Dell Technologies reported revenues of $22.32 billion in the last reported quarter, representing a year-over-year change of -10.9%. EPS of $2.20 for the same period compares with $1.80 a year ago.
The company beat consensus EPS estimates in each of the trailing four quarters and topped consensus revenue estimates three times over this period. The consensus sales estimate of $21.75 billion for the current quarter points to a year-over-year change of +4%. The $93.7 billion and $101.81 billion estimates for the current and next fiscal years indicate changes of +6% and +8.7%, respectively. Dell Technologies continues to expand its AI server portfolio and enhance its generative AI solutions offerings. With a focus on performance and efficiency, Dell’s latest-generation servers are well-positioned to meet the demands of modern computing environments. The company’s recent developments and strategic initiatives reflect its commitment to innovation and customer satisfaction, positioning it for continued success in the evolving technology landscape.
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