Dell's $8B wipeout as AI server costs soar
Dell just saw its shares drop 10% on Friday after news broke about rising costs to build their AI-focused servers and growing competition.
That's nearly $8 billion in market value gone, associated with Friday's trading session.
Even though big names like Elon Musk's xAI and CoreWeave are lining up for Dell's AI tech, meeting all these orders is squeezing the company's profits.
Despite the dip, Dell is still aiming for a big year
Dell's profit margins slipped to 18.7%, missing Wall Street's 19.6% target—mainly because they're prioritizing getting AI servers out the door over making bigger profits right now.
Still, Dell is upbeat: they've boosted their annual AI server shipment goal to $20 billion and expect total revenue between $105-$109 billion this year, showing they're betting big on the future of AI.