Headlines
Dell raises growth targets for next four years on strong AI server demand
Published by Global Banking and Finance Review
Posted on October 7, 2025
2 min readLast updated: January 21, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on October 7, 2025
2 min readLast updated: January 21, 2026
Dell nearly doubles its profit growth target, driven by robust AI server demand, projecting significant revenue increases over the next four years.
(Reuters) -Dell on Tuesday nearly doubled its annual profit growth target for the next four years, betting on robust demand for its servers that power artificial intelligence workloads.
The company, whose customers include Elon Musk's AI startup xAI and CoreWeave, lifted its expectations for annual growth in adjusted earnings per share to at least 15% from around 8%.
Its shares surged nearly 3% in early trading after the company also said it expects compounded annual revenue growth between 7% and 9% for the next four years, up from its prior view of 3% to 4%.
Insatiable demand for servers that provide the computing power needed to run services such as ChatGPT has turned Dell into one of the biggest winners of the generative AI boom.
Its strong profit growth expectation may also ease investor concerns about the margin hit from competition in AI servers and the high costs of building the products.
Dell also reiterated its third-quarter and annual forecasts. It had raised its expectation for AI server shipments in August to $20 billion for fiscal 2026.
"Customers are hungry for AI and the compute, storage and networking we provide to deploy intelligence at scale," CEO Michael Dell said, adding that the company was in the early stages of AI adoption despite two years of progress.
Dell expects long-term compounded annual revenue growth of 11% to 14% for the infrastructure solutions group - home to its storage, software and server offerings. That compares with its earlier expectations of 6% to 8%.
The company continues to expect revenue growth of 2% to 3% for its client solutions group, which includes personal computers. Strong competition in the consumer market has hit the business in recent years, even as Dell keeps a strong position among enterprise clients.
The company is expected to benefit from a PC refresh cycle after Microsoft ends support for Windows 10 next week, as users and companies seek to maintain security and access to the latest features.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Arun Koyyur)
Artificial intelligence (AI) refers to the simulation of human intelligence in machines designed to think and act like humans. AI can perform tasks such as learning, reasoning, and problem-solving.
Profit growth is the increase in a company's earnings over a specific period, often expressed as a percentage. It indicates the company's ability to generate more income than expenses.
Servers are powerful computers that provide data, resources, or services to other computers, known as clients, over a network. They play a crucial role in hosting applications and managing data.
Revenue growth refers to the increase in a company's sales over a certain period. It is a key indicator of business performance and market demand.
CAGR is the mean annual growth rate of an investment over a specified time period, assuming the investment grows at a steady rate. It provides a smooth annual growth rate.
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