Dell beats second-quarter revenue estimates on strong AI server demand

Dell Technologies beat Wall Street estimates for second-quarter revenue on Thursday, driven by strong demand for its AI-powered servers amid a recovering personal computer market.

Shares of the Round Rock, Texas-based company rose nearly 4 per cent in extended trading.

Dell has capitalised on increasing demand for its AI servers, which are powered by Nvidia's graphics processors. These servers are designed to meet the growing computing needs of AI systems, including training language models.

Revenue for the second-quarter ended Aug 2 rose about 9 per cent to $25.03 billion, beating analysts' average estimate of $24.53 billion, according to LSEG data.

"AI-optimised server demand was $3.2 billion, up 23 per cent sequentially, and $5.8 billion year to date. Backlog was $3.8 billion, and our pipeline has grown to several multiples of our backlog," Chief Operating Officer Jeff Clarke said in a statement.

Dell's revenue for the infrastructure solutions group, which includes its storage, software and server offerings, rose about 38 per cent to a record $11.65 billion. In contrast, revenue for the client solutions group - home to PCs - fell about 4 per cent to $12.41 billion.

The global PC market continued to recover in the second quarter, with total shipments rising 3.4 per cent from a year earlier to 62.8 million units, according to research firm Canalys.

The results come after a Reuters exclusive report that said Dell is again exploring a possible sale of cybersecurity firm SecureWorks, following previous unsuccessful attempts to find a buyer.