Dell on Thursday forecast a decline in its adjusted gross margin rate for fiscal year 2026, hit by higher costs to build artificial intelligence servers in a fiercely competitive market, while its PC business also lagged amid soft demand.

Texas-based technology company Dell projects a 53% annual revenue rise from its AI server sales, hoping to earn over $15 billion this year from AI server shipments alone.

The company faces tough competition from rival PC makers such as HP Inc at a time when a sweeping U.S. trade tariff on China could hurt companies by triggering a price increase on tech products. Research firm International Data Corporation (IDC) on Thursday lowered its traditional PC forecast for 2025 and beyond,

Dell Technologies forecast annual profit above Wall Street estimates on Thursday on the back of cost cuts and growing demand for its AI-optimized servers, sending the company's shares up 3% in extended trading.