Dell Raises AI Server Outlook Amid Surging Demand and Backlog

Dell Technologies has significantly increased its annual AI server shipment forecast to $25 billion from $20 billion, following a surge in orders. The company reported $12.3 billion in AI server bookings for its fiscal third quarter, with $5.6 billion shipped and a backlog swelling to $18.4 billion. Operating margins in Dell’s infrastructure unit, which includes servers and networking, outperformed expectations at 12.4%, despite rising costs associated with fulfilling these orders.

The AI server market is heating up as competitors like Super Micro Computer and Hewlett Packard Enterprise also report soaring demand. Cloud providers and enterprises are racing to deploy systems capable of training increasingly complex AI models. Analysts project global AI server spending could surpass $200 billion annually by 2030, intensifying competition among hardware suppliers to secure lucrative contracts with hyperscalers.

Memory chip costs and supply chain challenges remain critical factors as vendors balance profitability with the need to meet explosive demand. The infrastructure build-out for AI workloads continues to drive unprecedented growth in the server market.