Earnings of the firm were mixed. Better-than-expected, earnings showed up less revenue than predictions. The firm’s AI sales were very impressive, even though a short-term view reported that as trading closed up in after-hour dealings stocks fell 10%.

The firm announced that during the quarter ended in October 2024, the company’s adjusted earnings per share came to $2.15 against Street’s $2.06 estimate. The company said total revenues for the quarter had come at $24.4 billion, much less than Street’s projected $24.67 billion.

Net income increased by 12% year-over-year to $1.12 billion, or $1.58 per share, from $1 billion, or $1.36 per share, in the same quarter last year. Total revenue increased around 10% to $22.25 billion in Q3 2023. Despite these promising revenues, Dell disappointed Wall Street in its outlook for the fourth quarter. It estimated revenue between $24 billion and $25 billion, much less than the $25.57 billion consensus estimate, and also estimated adjusted earnings per share at $2.50, less than the estimate of $2.65.

The most prominent performance highlights of the company are the AI business line, particularly in sales through AI servers.

Dell has solidified its position as a leading vendor of computer clusters used by AI developers, especially those reliant on Nvidia chips. AI-related sales have driven substantial growth in Dell’s Infrastructure Solutions Group (ISG), which saw a 34% year-over-year revenue increase, reaching $11.4 billion. Major share of this growth came through Dell’s servers and networking components, which had witnessed a 58% jump in revenue to $7.4 billion. For the quarter, Dell shipped $2.9 billion in AI servers and secured $3.6 billion in future AI server orders.

Despite the strong performance in AI, Dell’s forecast was impacted by shifting customer demand. Some clients are delaying purchases in anticipation of Nvidia’s next-generation Blackwell AI chips, which are still in production. According to Jeff Clark, Dell’s Chief Operating Officer, AI sales growth is likely to be volatile, as customers are always adapting to new technologies.

The Client Solutions Group, which focuses on PCs and laptops, was also down 1% year-over-year to $12.1 billion. Commercial PC sales rose 3%, while consumer PC sales fell 18%. While these mixed results were reported, Dell’s strength in the AI market remains a bedrock for its long-term growth prospects.