Memory prices are sky-high. Conventional wisdom says computer makers like Dell get squeezed, with margins taking the hit. But the opposite happened. Dell just posted record revenue, and profit grew 282% year-on-year in the latest quarter. The stock leapt 32% in a single day after the release. That was its best day on record.
Dell has two businesses. One makes computers and sells them at retail. The other sells to data-center clients, or enterprises in other words. And it’s the AI server side that’s on fire.
You can’t just have GPUs. You need the computers to house them. So the demand grows together. Dell’s AI-Optimized Servers revenue was up a staggering 757% year-on-year. That’s the engine behind the growth.
As for those high memory prices? Dell is simply passing the cost increase down to customers, and customers seem more than happy to pay just to get their hands on the machines.
Finally,
If you pull up the chart of Dell’s quarterly revenue, you’ll see records start breaking about three quarters ago. The momentum built, and the latest quarter showed the growth going exponential. That’s why a major re-rating is happening, with a 32% bump in a single day. An inflection has arrived.
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