Dell projects bigger gains through 2029 amid AI server momentum

Dell Technologies announced Tuesday it expects profits to grow much faster over the next four years, banking on continued strong sales of servers used for artificial intelligence work.

The computer maker nearly doubled its profit growth outlook during a meeting with financial analysts. The company now projects earnings per share will climb at least 15% each year, a big jump from its earlier estimate of around 8% annual growth.

Dell also boosted its revenue projections. The firm said it expects yearly sales to increase between 7% and 9% over the next four years. That replaces its previous forecast of 3% to 4% growth.

The improved outlook comes as companies race to buy servers that handle AI programs like ChatGPT. Dell counts Elon Musk’s AI company xAI and CoreWeave among its customers for these specialized machines.

“Customers are hungry for AI and the compute, storage and networking we provide to deploy intelligence at scale,” said Michael Dell, the company’s chief executive, as quoted by Reuters. He added that Dell remains in the early stages of AI adoption despite two years of development.

The company’s stock went up 2% Tuesday following the announcement.

Winning in the generative AI boom

Dell has emerged as a major beneficiary of the AI boom. However, some investors had worried that competition and high production costs might hurt profit margins on AI servers.

Jacob Bourne, who analyzes technology companies for Emarketer, said Dell holds an edge over competitors. “Dell has a volume advantage due to its scale, established supply chain, and relationships with major buyers, compared to rivals like Super Micro,” Bourne explained.

The company kept its predictions for the current quarter and full year unchanged. Back in August, Dell had already raised its AI server shipment target to $20 billion for fiscal year 2026.

Dell reported selling roughly $10 billion worth of AI-optimized servers during fiscal 2025. For the current fiscal year, the company anticipates AI system sales will reach about $15 billion.

Dell’s infrastructure unit sees biggest gains

The infrastructure solutions division, which handles storage, software, and servers, will see the biggest gains. Dell expects this unit’s revenue to grow between 11% and 14% annually over the long term. The company had previously estimated growth of 6% to 8% for this division.

Meanwhile, Dell’s client solutions group, which sells personal computers, faces tougher conditions. The company still expects this division to grow 2% to 3% yearly. Heavy competition in the consumer market has created challenges for this business in recent years, though Dell maintains a strong presence selling computers to business customers.

Michael Dell said the company is successfully turning customer demand into growth and strong cash flow, which has mostly been returned to shareholders.

The higher growth targets reflect what Dell called “the unprecedented pace of change in technology,” especially in artificial intelligence.