Dell Raises AI Server Sales Outlook While HP Cuts Jobs
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This is Bloomberg Tech. Coming up, we zero in on tech earnings, with Dell raising its AI server shipment outlook while HP announces job cuts. Plus, Warner Bros. Discovery asking bidders for sweetened offers by December 1st as it explores options for a sale. And Nvidia in focus as doubts over the company's AI chip dominance are growing. I'm Jim Senevec in New York, in for Caroline Hyde and Ed Ludlow. Let's get a check on markets right now. U.S. stocks advancing as expectations for an interest rate cut at the Fed's next meeting are helping to fuel gains before the Thanksgiving break. NASDAQ 100 up right now, and look at the last three days, up 4%. This after both the S&P 500 and NASDAQ 100 moved away from their last record highs in late October.
The NASDAQ 100 down about... let's say 3.6% from that all-time high. The S&P 500, though, down just a little over 1%. We're also looking at tech earnings with Dell and HP. Dell raising its annual projections for the AI server market thanks to sustained demand for machines needed in the current data boom. Meanwhile, HP stock under pressure, down 2.2% right now. The company announced 4,000 to 6,000 job cuts over the next couple of years by using more AI tools. For more on HP and Dell, let's bring in Bloomberg's Dena Bass. Dena joins us here in New York. I want to start with HP. 4,000 to 6,000 jobs sounds like a lot. And indeed, if we go to the 6,000, that's like a 10% of the company's workforce, but that's through 2028 fiscal year.
So we're a few years away from that. And if it's AI that they're going to replace these people with, AI can change a lot between now and then.
Sure. And to be clear, HP did a similar magnitude job cut over the last three years. They just finished it. They have these kind of periodic efficiency plans, I guess. What's new about this one is the idea is that they are going to use AI tools and models to do things like product development, customer service, sales. And that's where you're getting these job cuts. And at the same time, even though they're going to be saving money that way, they said, they actually came in below on their guide for next year for fiscal year profit, and that was because of a completely different issue around memory price increases. So you had both, you had these job cuts, and it's not making the bottom line look where people expected it would come in.
Well, speaking of those price increases, that also hitting Dell. So let's talk a little bit about Dell. Dell is contending with despite strong demand, how is it going to make its AI server business more profitable?
So the AI server business, and it's basically said, I know you're going to be talking about GPUs in a minute. Those are the servers that have GPUs that go into these AI data centers. And the demand for them has been very high for Dell and other makers of them. The problem is that in order to get some of these deals and in order to deploy some of those servers, Dell was basically incurring more significant costs. What they're trying to do now is pull back from that a little bit. to widen the profit margin in that business. They succeeded in the last quarter, they told me, because they were able to serve a more diverse group of customers, so some of those were at better, more profitable sets of deals.
Yeah, I think these rising costs are going to be a theme throughout the next year as well.
What is Dell's updated outlook for AI server shipments?
Dina, always good to see you.
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