Dell’s recent financial report revealed that the company is on track to sell $15 billion worth of AI servers in fiscal 2026, driven by strong demand from major customers like Elon Musk’s xAI Grok model builder. However, margins are a concern, and Dell’s top brass acknowledged that it will need to offer significant deals to traditional server sales to compensate for the expected decline.
Dell’s Infrastructure Solutions Group (ISG) reported $10.32 billion in sales, up 11.8 percent, with Servers & Networking division sales rising 15.6 percent. The Storage division also saw significant growth. Despite strong AI system orders and deliveries of $1.8 billion in the first quarter, Dell’s debt increased by $4.21 billion.
The company expects its cash hoard to grow 30.4 percent to $9.29 billion due to higher net income from services sales. However, traditional server sales are expected to decline 13.1 percent to around $4 billion in the next quarter.
Dell’s systems business is forecasted to surpass its PC business for the first time in Q4, with estimated sales of $29 billion. The company reiterated its guidance that it will generate between $101 billion and $105 billion in fiscal 2026, but warned that Nvidia’s datacenter business will be significantly larger and more profitable.
The analysis suggests that Dell needs to drive significant GPU sales to achieve its AI revenue targets, with estimates ranging from 260,000 GPUs. However, this also highlights the challenges of making a profit in the supercomputing market, where demand can be unpredictable and margins are often thin.
Source: https://www.nextplatform.com/2025/05/30/dell-sets-up-for-a-killer-spike-in-ai-server-sales