Dell Technologies is sharply raising its long-term financial outlook, signalling that the boom in artificial intelligence servers is not a temporary trend but the foundation for future growth. The company, which supplies infrastructure to Elon Musk’s xAI, among others, has almost doubled its earnings per share growth target for the next four years.
The conglomerate now expects annual adjusted earnings per share (EPS) growth of at least 15 per cent, up from around 8 per cent previously. The cumulative annual revenue growth (CAGR) forecast has also more than doubled from 3-4% to 7-9% by fiscal 2029.
The main driver is demand for AI-optimised servers. The infrastructure solutions division, which includes servers and storage, is now expected to grow at a CAGR of 11-14% per year, rather than 6-8% as previously assumed. This is in response to the market’s insatiable appetite for the computing power needed to train and deploy language models.
The optimistic outlook is expected to allay investor concerns about margin pressure in the highly competitive AI hardware segment. Analysts point out that Dell’s advantage over rivals such as Super Micro is its scale of operations, mature supply chain and established relationships with key corporate customers.
Despite the euphoria around AI, the company is maintaining a conservative approach to its other pillar, the PC business. The Client Solutions Group division is expected to record stable but low growth of 2-3%, reflecting saturation and strong competition in the PC market. The new forecasts show where Dell sees its future – in the server room, not on the desktop.
