Dell shares rise after the company reports better-than-expected earnings, an increase in AI servers

Key recommendations

• Dell’s second-quarter results beat top- and bottom-line expectations.

• Server and networking revenue rose 80% to a record $7.7 billion.

• Demand for AI-optimized servers grew 23% sequentially.

Dell Technologies (della) shares rose after the bell on Thursday after second-quarter earnings beat analysts’ expectations on the strength of artificial intelligence (AI) sales.

Revenue rose 9% year-over-year to $25 billion, beating the consensus of analysts at Visible Alpha. Server and networking revenue rose 80% to a record $7.7 billion, boosted by strong demand for both AI and traditional servers. Diluted earnings per share came in at $1.17, up year-over-year and well ahead of expectations.

“Our AI momentum accelerated in Q2 and we saw an increase in the number of enterprise customers buying AI solutions each quarter,” said COO Jeff Clarke. Demand for AI-optimized servers, he said, was $3.2 billion, up 23% sequentially.

Server and networking revenue is part of Dell’s infrastructure solutions group, which saw revenue grow 38% to $11.6 billion. Revenue in the client solutions group fell 4% to $12.4 billion.

Dell shares, which were down in regular trading on Thursday, were up about 2 percent in early after-hours trading.

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