Michael Dell, founder and CEO of Dell Technologies (DELL), believes that rumors of disappointing AI spending are greatly exaggerated.
“There are always bumps in the road when you launch a rocket and create new capabilities. You have new product cycles. You have new introductions of things. And some customers want the existing ones faster. Some want to wait for the new ones. We have all of the above,” Dell told Yahoo Finance at the Citi TMT conference in New York City on Wednesday.
“But the macro picture here is very, very clear, and that is that there is tremendous demand. It’s growing. It’s expanding from the hyperscalers to the service providers to the enterprise to commercial to sovereign AI to embedded AI to the edge to retail to manufacturing to your PC to here, there and everywhere,” he added.
Dell’s second quarter underscored why the tech giant’s shares have surged an impressive 45% so far this year. Part of that is because the company is seen as a key player in building out America’s AI infrastructure.
The company said it brought in $3.1 billion in AI server sales in the quarter, nearly double the $1.7 billion it brought in the previous quarter.
Revenue in the company’s Infrastructure Solutions Group (ISG) rose 38% to $11.65 billion. AI revenue is generated in the ISG segment.
Dell’s Client Solutions Group — which includes sales of PCs and laptops — saw sales fall 4 percent to $12.41 billion. Consumer sales fell 22 percent to $1.86 billion, while the commercial business was flat at $10.6 billion.
“Organizations see this as a historic opportunity to make their businesses more productive and efficient, while at the same time reimagining their businesses with all of these capabilities,” said Dell, who founded the company in 1984.
Overall, Wall Street is still bullish on Dell stock because of its exposure to AI and because it appears too cheap to ignore.
“Combining the income opportunities [for AI] In the medium term – raising the prospect of double-digit core revenue growth, and continued focus on operating expenses, we see a robust trajectory for earnings growth [for Dell] “That is not fully appreciated in the 13 price-to-earnings multiple at which the shares currently trade,” JPMorgan analyst Samik Chatterjee said in a note to clients.
Chatterjee reiterated the Overweight rating on Dell shares, which equates to a Buy rating.
Three times a week I have insightful conversations with the biggest names in business and markets on Yahoo Finance’s Opening bid podcast. Find more episodes on our video hub. Pay attention to your preferred streaming service. Or listen and subscribe to Apple Podcasts, Spotifyor wherever you find your favorite podcasts.
In the episode of Opening Bid below, DataStax CEO Chet Kapoor discusses his collaboration with Apple (AAPL) co-founder Steve Jobs and his vision for AI.
Brian Sozzi is Yahoo Finance’s Executive Editor. Follow Sozzi on X @BrianSozzi and further LinkedIn. Tips on deals, mergers, activist situations or anything else? Email brian.sozzi@yahoofinance.com.
Click here for the latest technology news that will impact the stock market
Read the latest financial and business news from Yahoo Finance
