(AOF) – The fever around artificial intelligence is not waning, quite the contrary. Less than 15 days after Nvidia gained $277 billion in capitalization in a single session, Dell shares soared more than 26% to $119.83. The IT group has revealed promising prospects supported by the rise of artificial intelligence. “The dynamism of AI should lead to an increase in valuation multiples which will compensate for the weakness in demand for PCs,” explains UBS, which increased the price target on Dell’s stock from $99 to $113.
“We are just beginning to see the possibilities that lie ahead in AI,” management said during the conference call with analysts. She said the order backlog for servers optimized for artificial intelligence stood at $2.9 billion at the end of the last fiscal year in early February. It jumped 80% compared to the previous quarter.
The IT group anticipates revenues for the current fiscal year of between $91 and $95 billion, or an average growth of 5%, compared with Wall Street’s forecast of $92.1 billion. Adjusted earnings per share are forecast between $7.50 and $7.75 while analysts on average are targeting $7.11.
Strong end to the year
In the fourth quarter, ended in early February, Dell saw its net profit jump 91% to $1.16 billion, or $1.59 per share. Adjusted for exceptional items, earnings per share came to $2.20, where the market was targeting only $1.72.
Revenues fell 11% to $22.3 billion, coming in slightly above expectations: $22.2 billion. Its Infrastructure Solutions Group division, which houses the servers, however, saw a 10% increase in revenue to $9.3 billion quarter over quarter. Over the period, Dell delivered $800 million worth of AI-optimized servers.
Finally, Dell also increased its annual dividend by 20% to $1.78 per share.
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