Dell's AI Investments Impact Profits but Boost Server Sales
Dell's shares fell over 17% after the company forecasted lower-than-expected current-quarter profit and indicated that higher costs for AI-optimized servers would reduce its annual margin. Despite a surge in demand for AI-capable products and a significant increase in shipments of AI-optimized servers, Dell's adjusted gross margin rate is expected to decline due to inflationary input costs and competitive pricing. The company raised its revenue forecast for fiscal 2025 but expects a decline in adjusted profit per share for the current quarter.
