Dell’s AI Demand Surge Fails to Offset Weak Profit Projection

Dell Technologies shares tumbled 7% in premarket trading after issuing a softer-than-expected Q3 profit forecast, despite record AI server demand. The company now projects $2.45 adjusted EPS for the current quarter, missing analyst estimates of $2.49.

AI-driven growth remains Dell's bright spot, with COO Jeff Clarke announcing $10 billion in AI solution shipments during H1 FY26—already surpassing FY25's total. Server and networking revenue jumped 69% year-over-year, prompting the firm to raise its full-year AI server shipment guidance to $20 billion.

The divergence between booming AI infrastructure demand and disappointing profitability reflects the capital-intensive nature of scaling AI operations. Citi analysts note the raised shipment targets bode well for Nvidia and Micron, key suppliers in the AI hardware ecosystem.