Dell beats estimates as server sales soar 80%, riding AI wave

Dell reported quarterly results on Thursday that beat Wall Street expectations, powered by an 80% increase in server sales. The stock rose more than 3% in extended trading.

Here's how the company did for the fiscal second quarter vs. LSEG consensus estimates:

Net income climbed 85% to $841 million, or $1.17 per share, from $455 million, or 63 cents per share, in the year-ago period. Revenue increased about 9% from $22.93 billion a year ago.

The stock took a leg lower after Dell revised its full-year guidance to between $95.5 billion and $98.5 billion, a slight upward revision from the company's previous forecast. Earlier this year, the company told investors to expect revenue between $93.5 billion and $97.5 billion for the full year, up from $88.4 billion in the prior year.

For the current quarter, Dell said it expected between $24 billion and $25 billion in revenue, in line with the StreetAccount estimate of $24.6 billion.

Dell has emerged as a top vendor for servers that can handle artificial intelligence workloads, especially those based around Nvidia chips, as demand skyrockets from cloud providers. Earlier this year, Nvidia CEO Jensen Huang called out Dell founder Michael Dell as the person to contact to place orders for systems that include the company's new chips.

Dell shares are up 48% so far this year, but have slumped 34% since the company's last report.

AI sales are in the company's Infrastructure Solutions Group, which makes servers and systems for data centers. It's the company's fastest-growing unit. Overall ISG sales rose 38% to $11.65 billion, ahead of StreetAccount expectations of $10.44 billion.

The standout in Dell's report was Servers and Networking revenue, which includes both AI-oriented servers based