The Grey Box Shifter, Dell, saw its shares rocket after AI server sales surged and the Pentagon waved a fat contract.
According to the Wall Street Journal, shares in the computer hardware maker jumped nearly 40 per cent in after-hours trading following its report of scorching growth in AI servers for data centres.
The move came as details surfaced of a new $9.7 billion US military contract, which also helped the market find its enthusiasm.
Dell reported first-quarter revenue of $43.8 billion, up 88 per cent from a year earlier. More than a third of that, $16.1 billion, came from AI-optimised server sales, with the segment leaping 757 per cent year on year.
The outfit lifted its full-year AI revenue forecast to $60 billion, up 144 per cent from the previous year. That was higher than the $50 billion it predicted in February, before the AI server gravy train apparently found another gear.
Dell’s stock had already gained about four per cent during regular trading on Thursday before properly taking off after the market closed.
The five-year Pentagon contract gives Dell “a blanket purchase agreement” for Microsoft software and services. Those services will be supplied across the Defence Department, the US Coast Guard and the intelligence community.
The department said the award is part of a plan to restructure its software and cloud-based communication and collaboration systems. It wants to push more AI tools across the military.
The department said the single Dell contract replaces dozens of separate contracts serving scattered groups. It expects the arrangement to save about $422 million a year.
Coincidentally, as we are sure that it has nothing to do with the deal, President Trump’s money managers made large purchases of Dell stock. On 10 February, Trump’s accounts bought Dell shares in a transaction worth between $1 million and $5 million.
About a week later, while speaking to steelworkers in Georgia, Trump praised Dell chief executive Michael Dell and told the crowd to “go out and buy a Dell computer.”
Since then, Dell shares have risen about 150 per cent, which is handy timing but purely a coincidence.
