Dell Technologies shares fell by 16% this morning. Several aspects of Dell's results were disappointing. Firstly, backlog figures of $3.8 billion were below expectations. Secondly, AI servers are not yet generating profits, contrary to the typical 9-10% profitability for servers.

In AI, it seems that Dell is adopting an aggressive pricing strategy as it seeks to gain market share, which could dilute its margins in the short term. This is corroborated by Supermicro's results, which point to competitive pressure affecting margins.

Dell forecasts that around $8 billion in annual revenues will come from AI servers, with $2.2 billion expected in the next quarter. 

 


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