Dell Technologies Inc (NYSE:DELL) stock plunges 12.90% (As on November 27, 11:36:47 AM UTC-4, Source: Google Finance) after the company gave weak guidance. The company is forecasting lower server sales, and blamed the shortfall on enterprise customers that are waiting to snap up new systems powered by Nvidia Corp.’s next-generation Blackwell graphics processing unit chips and therefore shifting to later orders, some of which won’t be reflected in the current quarter. The personal computer and server giant reported third-quarter earnings that beat analysts’ expectations, but its revenue for the period came up light. Net income for the quarter rose 12%, to $1.12 billion, up from just over $1 billion in the year-ago period.

Moreover, Dell reports AI server sales within its Infrastructure Solutions Group, which also includes sales of traditional servers, storage and networking systems, and revenue there jumped 34% to $11.45 billion in the third quarter. Within that segment, servers and networking delivered $7.4 billion in sales, up 58% from a year ago, with AI servers accounting for $2.9 billion. The company also saw increased demand for its traditional servers, which are powered by central processing units from companies such as Intel Corp. and Advanced Micro Devices Inc. Sales of those systems increased by double-digits. Storage systems generated another $4 billion in sales, up 4% from the same period last year. Dell’s other main business segment is the Client Solutions Group, which accounts for sales of PCs and laptops. For now, it remains the company’s biggest business, even though sales declined 1% from a year earlier, to $12.1 billion. Dell said sales of commercial PCs, or those bought by companies for their employees, rose 3% to $10.1 billion, while consumer PC sales declined 18%, to just $2 billion.

DELL in the third quarter of FY 25 has reported the adjusted earnings per share of $2.15, beating the analysts’ estimates for the adjusted earnings per share of $2.06. The company had reported the adjusted revenue growth of 10 percent to $24.4 billion in the third quarter of FY 25, missing the analysts’ estimates for revenue of $24.67 billion.

For the current quarter, Dell is looking for revenue of between $24 billion and $25 billion, below the Street’s target of $25.57 billion. The shortfall will impact the company’s profitability too. In terms of earnings, Dell said it’s looking at $2.50 per share at the midpoint of its guidance range, below the Street’s consensus estimate of $2.65 per share.