(Automated translation by Reuters, please see disclaimer
(Added share price to paragraph 2)
Dell Technologies DELL.N missed Wall Street expectations for its third-quarter revenue on Tuesday, weighed down by weaker demand for its traditional PCs and fierce competition from rival server makers.
The company’s shares fell more than 5% to $134 in extended trading.
Dell reported revenue of $24.37 billion for the quarter, compared with analysts’ average estimate of $24.67 billion, according to data compiled by LSEG.
Despite booming demand for Dell’s AI-optimized servers, used to handle large AI workloads, its traditional PC segment has faced stiff competition from rivals such as HP and lower consumer spending amid an uncertain economy.
Revenue for Dell’s Customer Solutions Group, which includes the PC business, came in at $12.13 billion, below expectations of $12.43 billion.
“Interest in our portfolio has never been greater, leading to a record demand of $3.6 billion in AI server orders in the third quarter and a more than 50% increase in pipeline,” he said. said Jeff Clarke, Dell’s chief operating officer, Tuesday.
As Dell’s server revenue rises, investors are closely watching the company’s costs after it reported in May that higher spending to build AI-intensive servers and competitive pricing would hurt its margins.
The company is also banking on new artificial intelligence PCs to boost its traditional IT activities.
Revenue at Dell’s infrastructure solutions group, which includes its AI servers, rose 34% to $11.37 billion, compared with estimates of $11.35 billion.
The company’s server and networking revenue for the third quarter jumped 58% to $7.36 billion, but missed estimates of $7.64 billion.
**How do the divergent performance trends in Dell’s PC and AI server business segments reflect broader shifts in the technology market and consumer behavior?**
## World Today News: Dell’s Tightrope Walk Between Traditional and AI-Driven Future
**Welcome to World Today News. We’re here today to unpack Dell Technologies’ recent earnings report, which paints a complex picture of the company navigating the evolving tech landscape.**
Joining us today are:
* **Dr. Emily Carter**, Professor of Technology and Innovation at the University of California, Berkeley, offering an academic perspective on market trends.
* **Mr. David Thompson**, Technology Analyst at Greenridge Investments, providing insights from the financial market.
**Section 1: A Tale of Two Businesses: Traditional PCs vs. AI Servers**
* **Host:** Dr. Carter, Dell’s report shows a clear divergence in performance between their traditional PC business and the booming AI server segment. How do you interpret this duality, and what does it tell us about the future of technology consumption?
* **Host:** Mr. Thompson, investors reacted negatively to Dell’s overall revenue miss, even though AI server growth is impressive. Can you help us understand the market sentiment towards Dell’s strategy, balancing legacy products with cutting-edge AI solutions?
**Section 2: The Great Pinch: Competition and Consumer Spending**
* **Host:** Dr. Carter, Dell attributed weaker PC sales to both fierce competition and declining consumer spending. How impactful are these pressures in the broader context of the PC market’s evolution? Do you see these challenges as temporary or indicative of a larger shift?
* **Host:** Mr. Thompson, Dell mentioned higher spending to build AI servers and competitive pricing pressures. How sustainable is this strategy in the long term? Will Dell’s foray into AI create enough value to offset potential margin erosion in the PC market?
**Section 3: The AI Golden Ticket: Can Dell Ride the Wave?**
* **Host:** Dr. Carter, Dell is banking on new AI-powered PCs to revitalize its traditional business. Do you see this as a viable approach? What are the potential pitfalls and opportunities in integrating AI into consumer PCs?
* **Host:** Mr. Thompson, Dell’s stock price fell despite positive mentions of record AI server orders. Do you see this as an overreaction by investors, or are there underlying concerns about Dell’s ability to capitalize on the AI server boom?
**Section 4: Looking Ahead: The Future of Dell**
* **Host:** Dr. Carter, how do you see Dell positioning itself in the long term? Will they be a leader in the AI revolution, or will they struggle to adapt to the evolving technological landscape?
* **Host:** Mr. Thompson, what are your key takeaways for investors considering Dell as a potential investment? What factors should they be watching closely in the coming months and years?
**Closing Remarks:**
Thank you, Dr. Carter and Mr. Thompson, for sharing your valuable insights. This has been a fascinating look into Dell’s challenges and opportunities. It seems clear that while the company’s traditional business faces headwinds, its commitment to AI presents a compelling path forward in the ever-changing tech arena.
