Dell Bets on Rising AI Server Demand to Forecast Higher Growth

Dell has forecast fourth-quarter revenue and profit above Wall Street estimates, as increasing investments in data centers to support artificial intelligence (AI) boost demand for its servers, sending its shares up 5% in premarket trading, Jaspreet Singh reported for Reuters.

Dell now expects $25 billion in fiscal 2026 revenue from AI server shipments. (Photo: Dell X)

The company also announced the permanent appointment of David Kennedy as its finance chief.

Dell, which raised its annual revenue and profit expectations, offers AI-optimized servers equipped with Nvidia’s powerful chips. Its strong forecast comes amid investor concerns about margin pressure due to competition in the AI server market from rivals such as Super Micro Computer and the high cost of production.

Dell now expects $25 billion in fiscal 2026 revenue from AI server shipments, up from its prior estimate of $20 billion.

The company’s AI server backlog rose to $18.4 billion by the end of the third quarter, fueled by $12.3 billion in new orders. It shipped servers worth $5.6 billion in the quarter.