Dell's Ai Server Sales Outlook Fails to Ease Profit Worries
Dell Technologies Inc. has provided a strong outlook for sales of servers optimized for artificial intelligence, but investors remain concerned about the profitability of these products due to the high cost of chips from Nvidia Corp. The company expects to ship $15 billion worth of AI servers in 2026, a 50% jump over the previous year, with its backlog increasing to $9 billion after deals with prominent customers such as Elon Musk's xAI. Despite this growth, Dell's gross margin is expected to decline by 1 percentage point from a year earlier.
- The growing demand for AI servers highlights the need for highly specialized and expensive computing hardware, which can pose significant challenges to companies looking to balance profitability with innovation.
- How will the increasing adoption of AI in various industries impact the broader chip manufacturing landscape, particularly for companies like Nvidia that are heavily reliant on high-end server sales?