(Reuters) -Dell Technologies beat Wall Street estimates for second-quarter revenue and profit on Thursday, driven by strong demand for its AI-powered servers amid a recovering personal computer market.
Shares of the Round Rock, Texas-based company rose 3.3% in extended trading.
Dell (NYSE:) has capitalized on increasing demand for its AI servers, which are powered by Nvidia (NASDAQ:)’s graphics processors. These servers are designed to meet the growing computing needs of AI systems, including training language models.
Revenue for the second-quarter ended Aug 2 rose about 9% to $25.03 billion, beating analysts’ average estimate of $24.14 billion, according to LSEG data.
The company reported adjusted profit per share of $1.89 per share, compared with estimates of $1.71 per share.
“AI-optimized server demand was $3.2 billion, up 23% sequentially, and $5.8 billion year to date. Backlog was $3.8 billion, and our pipeline has grown to several multiples of our backlog,” Chief Operating Officer Jeff Clarke said in a statement.
Dell’s revenue for the infrastructure solutions group, which includes its storage, software and server offerings, rose about 38% to a record $11.65 billion. In contrast, revenue for the client solutions group – home to PCs – fell about 4% to $12.41 billion.
Dell took a $328 million charge for workforce reductions in the second-quarter, CFO Yvonne Mcgill said.
The global PC market continued to recover in the second quarter, with total shipments rising 3.4% from a year earlier to 62.8 million units, according to research firm Canalys.
The results come after a Reuters exclusive report that said Dell is again exploring a possible sale of cybersecurity firm SecureWorks (NASDAQ:), following previous unsuccessful attempts to find a buyer.