Dell Technologies Inc. (NYSE: DELL) just posted a blowout second quarter fueled by soaring demand for artificial intelligence infrastructure, and its CEO, Jeff Clarke, said it’s been a nonstop hunt for parts across nearly every part of the supply chain
“Welcome to the Life of a Supply Chain Person at Dell”
Asked on the company’s second-quarter earnings call about the state of supply constraints, Clarke gave a long list of shortages spanning nearly every layer of the hardware stack.
“The constraints remain the same. DRAM, followed by NAND. We have spotty CPU shortages. There are shortages with disk drives,” he said, adding that “just about every product going through a leading node is constrained,” including power components, substrates, and optical parts.
“Welcome to the life of a supply chain person at Dell Technologies. This is what we do, chasing parts. We love it,” he added.
Demand Outran Supply
Dell has responded by “optimizing the bits and bytes” it receives, including shifting components toward its infrastructure business earlier this year as PC demand softened.
“Demand outran supply last quarter. Demand outran supply this quarter,” Clarke said, adding that the company’s pipeline “remains robust,” as AI server orders hit a record $60.9 billion in the quarter, pushing Dell’s backlog to $95 billion.
Counterpoint Research director MS Hwang said last month that the industry’s competing memory expansion plans won’t simultaneously translate into meaningful production until “2028 at the earliest,” while SK Hynix Inc. (NASDAQ:SKHY) CEO Kwak Noh-Jung has warned the current memory shortage will persist through 2030.
“We are doing everything we can to get more supply. In today’s environment, that’s a very difficult task,” Clarke added.
Another Blowout Quarter, and an Even Bigger Guide
In the second-quarter, Dell reported adjusted earnings of $7.04 per share, blowing past the $4.91 analyst consensus, according to Benzinga Pro. Revenue came in at $46.97 billion, well ahead of the $44.95 billion Wall Street expected.
For the third quarter, the company guided to adjusted EPS of $6.50, versus a $4.49 estimate, and revenue of $49 billion, versus the $41.43 billion analysts’ expectations.
Price Action: The shares closed 6.8% lower on Tuesday at $425, and climbed nearly 8% to $459.03 in after-hours trading.
The stock has surged 232.55% so far this year and 251.36% over the past year.
Benzinga edge rankings indicate Dell’s stock has a Momentum score in the 99th percentile and a Growth score in the 77th percentile.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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