Dell Expects AI Server Revenue to Double Next Year

Dell said it expects revenue from its key artificial intelligence (AI)-optimized server business to double in fiscal year 2027 and promised to return more cash to shareholders, sending its shares surging 10% in extended trading, Jaspreet Singh reported for Reuters. Dell stock jumped 12% during premarket trading.

U.S. trade regulations and surging memory chip costs due to the AI infrastructure buildout have forced companies like Dell and HP Inc. to implement price increases. (Photo: Dell Technologies Facebook)

The company announced a 20% increase in its cash dividend and an additional $10 billion for its share repurchase program.

Big tech firms such as Alphabet, Microsoft, Amazon, and Meta are expected to spend at least $630 billion to build AI infrastructure this year, which would boost demand for server and data center equipment from vendors such as Dell and rival Super Micro Computer.

U.S. trade regulations and surging memory chip costs due to the AI infrastructure buildout have forced companies like Dell and HP Inc. to implement price increases, helping them offset cost pressures.

Almost all servers use memory chips that hold data and instructions, keeping processors running at high speed — a key requirement for AI applications.