Dell Technologies has surpassed Wall Street estimates for its fourth-quarter revenue and profit, driven by strong demand for its AI servers. The company's shares saw a significant boost of 19% in after-hours trading following the positive announcement.

The PC market, which experienced a slowdown in revenue growth starting in 2022, is now showing signs of recovery. The surge in work-from-home demand for PCs and electronics during the pandemic has subsided, but Dell's AI server business has picked up the slack. The company has also benefited from the rising demand for its AI-optimized servers equipped with Nvidia's graphics processing units (GPUs), which cater to the expanding needs of high-performance computing.

Jeff Clarke, Chief Operating Officer of Dell Technologies, expressed his satisfaction with the momentum of the AI-optimized server business, reporting a nearly 40% sequential increase in orders and a doubling of the backlog, reaching $2.9 billion by the end of the fiscal year.

This positive trend in the PC market is not exclusive to Dell. Last week, Lenovo Group also reported better-than-expected earnings in the third quarter, with revenue returning to growth after five consecutive quarters of decline.

According to data research firm Canalys, the global PC market witnessed a 3% growth in the fourth quarter of 2023, and analysts predict an even stronger recovery in 2024.

Dell Technologies reported a fourth-quarter revenue of $22.32 billion, slightly surpassing the average estimates of $22.16 billion from analysts. The company's fourth-quarter profit per share, excluding items, amounted to $2.20, exceeding the estimated $1.73 per share.

While the infrastructure solutions group, consisting of storage, software, and server offerings, experienced a decline of approximately 6% in revenue, the client solutions group, which includes PCs, saw a decrease of nearly 12% in revenue.

Dell's strong performance in the fourth quarter is a positive sign for the company's outlook and the recovering PC market as a whole. The demand for AI servers is expected to continue driving growth in the coming months, positioning Dell Technologies for further success in 2024.