Dell Says Servers, Not PCs, Are Its Main Growth Engine in the AI Era
The corporation that provides technology for data centers, according to Dell Technologies Inc., the organization that assisted in ushering in the age of personal computing, has become its most prospective one.
The business unit that offers servers, data storage, and various other office equipment will expand by roughly seven percent throughout the next few years, almost doubling the estimate given in 2021, the business said in a statement to investors on Thursday. Dell anticipates PCs to recover from their decline and produce a steady revenue rise of approximately 2.5 percent.
Because artificial intelligence demands increasingly powerful devices, the growing interest in the field throughout the industry is generating some of the benefits, according to Jeff Clarke, chief operating officer at Dell.
He stated that Artificial Intelligence is addictive and it’s going to increase overall technology spend, pointing to the rising demand for servers with high-capacity storage space and graphics processing units like those produced by Nvidia Corp.
For a server supported for AI applications, the business stated in August that it currently has over two billion dollars in piled-up orders. The same lack of high-power CPUs that is limiting the remaining portion of the business is still a problem for Dell, according to Clarke. Demand exceeds the supply, and Clarke is the solo No. 2 to the chief executive officer and founder Michael Dell at Dell following Chuck Whitten’s resignation in August.
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Due to the significant drops in sales of personal computers following the pandemic, it has been a challenging year for computer manufacturers. Investors have focused on Dell’s server business as a result of the slowdown in computer growth in order to observe how the firm might profit from artificial intelligence, according to Bloomberg Intelligence expert Woo Jin Ho.
Dell refuses to give up on selling PCs, it still generates a total of 58 billion dollars in revenue annually, which accounts for over fifty percent of all sales. Simply put, the market’s potential for expansion has decreased, according to Clarke. However, a cycle associated with fresh purchases may be on the horizon given that Microsoft Corp. is urging customers to upgrade to the most recent version of its operating system, Windows, and that many PCs purchased before the epidemic are aging. Dell said that it will buy back additional stock and raised its long-term earnings growth estimate.
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