Despite the high demand for AI infrastructure, Dell continues to act cautiously.
Dell Technologies has an order backlog of $14.4 billion for AI-optimized servers, but is tempering investor expectations about potential growth. According to the company, demand for AI infrastructure remains high, but also unpredictable.
Strong Revenue Increase
During the explanation of the quarterly figures for fiscal year 2026, COO Jeff Clarke called the demand for AI servers exceptionally strong, writes The Register. This is mainly due to the collaboration with Nvidia. The Infrastructure Solutions Group (ISG) saw revenue increase to $10.3 billion, with 16 percent growth in the server and network segment.
Clarke emphasizes that AI projects are often large and complex, with irregular demand and detailed planned deliveries. Deployment is slowed by limitations in data center infrastructure, such as power supply and liquid cooling, and the need to coordinate hundreds of thousands of components per system.
Cautious Outlook despite Growth
Dell remains cautious. In May, sales stagnated, likely due to customers buying more than planned in previous months out of fear of import tariffs. Nevertheless, Dell posted a 5 percent growth in revenue to $23.4 billion, with operating income 21 percent higher than last year.
For the second quarter, Dell expects revenue of up to $29.5 billion and annual revenue of up to $105 billion.