Dell shares soar 15% after beating earnings expectations, cites rising demand for AI servers

Shares of Dell Technologies popped more than 15% during extended trading Thursday after the company released fourth-quarter results that beat analysts' estimates and showed strong demand for its artificial intelligence servers.

Here's how the company did:

Dell's revenue for the fiscal 2024 fourth quarter fell 11% from $25.04 billion in the year-ago quarter. The company reported net income $1.16 billion, up 89% from the $614 million it posted in the same period last year.

Chief Financial Officer Yvonne McGill said in a release that the company is increasing its annual dividend by 20% to $1.78 per share, which she called a "testament to our confidence in the business."

Dell's Infrastructure Solutions Group (ISG) reported $9.3 billion in revenue for the quarter, down 6% year over year but up 10% from the third quarter. Servers and networking revenue made up the bulk of that, with $4.9 billion in revenue driven by "AI-optimized servers." Storage revenue came in at $4.5 billion.

The company's Client Solutions Group (CSG) reported $11.7 billion for the quarter, down 12% year over year. That includes $9.6 billion in commercial client revenue, which fell 11% since the fourth quarter of last year, and $2.2 billion in consumer revenue, down 19% year over year.

"Our strong AI-optimized server momentum continues, with orders increasing nearly 40% sequentially and backlog nearly doubling, exiting our fiscal year at $2.9 billion," Chief Operating Officer Jeff Clarke said in the release.

For its first quarter, Dell said during its quarterly call with investors that it expects to report revenue between $21 billion and $22 billion.

The company said it is encouraged by momentum around AI, and that it expects to return to growth for fiscal 2025.