Dell, the top artificial intelligence (AI) server provider, saw its orders for AI-specialized servers in the first quarter of this year surge more than sevenfold compared to the previous quarter. The volume of AI servers shipped in the first quarter matches the total shipments from last year. This is indicative of the explosive increase in demand for AI infrastructure worldwide, as evidenced by the performance reports from major tech companies. While the AI sector is booming, the recovery of demand in the existing IT market, including PCs, has been slow, revealing a stark contrast.
On the 29th (local time), Dell reported that its AI-optimized server orders reached $12.1 billion (approximately 16.6 trillion won) in the first quarter of the 2026 fiscal year (February to April), marking a rise of about 612% from the previous quarter ($1.7 billion). As a result, the AI server order backlog increased from $4.1 billion (approximately 5.6 trillion won) in the last quarter to $14.4 billion (approximately 19.8 trillion won) in just one quarter. Jeff Clarke, Dell's Chief Operating Officer, noted during the earnings conference call, "We are experiencing unprecedented demand for AI servers."
Dell has projected its AI server sales to reach $15 billion (approximately 20 trillion won) this year. Just two years ago, the revenue from the AI server business was practically close to '0'; however, it has transformed into a lucrative venture in just two years. Dell has substantial clients, including Elon Musk's AI-focused company, xAI, as well as Amazon and Microsoft, leading cloud service providers. Continuing its collaboration with NVIDIA, Dell announced on the same day it would build a new supercomputer in partnership with the U.S. Department of Energy. NVIDIA, which released its first-quarter results the previous day, emphasized that the demand for AI infrastructure is expanding beyond corporations to countries worldwide.
However, despite the fervor in the AI infrastructure market, demand for traditional IT products like PCs remains sluggish. Dell, the third-largest player in the PC market, saw its consumer PC sales drop by 19% in the first quarter, and the operating profit for its PC division decreased by 16%. HP, the second-largest company in the PC industry, also lowered its annual performance forecast amid weak profit projections. HP's core businesses are PC systems and printer operations.
Enrique Lores, HP's Chief Executive Officer, diagnosed that a triple whammy of tariffs, an economic slowdown, and price increases is putting pressure on PC demand. During a conference call, he stated, "The current economic environment is clearly different from what it was in February," adding, "Consumer and corporate confidence has eroded, and the uncertainties surrounding tariffs along with price increases across the industry are causing a much greater impact than anticipated." He noted that the PC market is expected to grow at a slower pace due to the economic slowdown, revising the annual adjusted earnings forecast from $3.45-$3.75 to $3.00-$3.30. As a result, HP's stock fell by 8.27% on that day.
Within the PC industry, there were expectations that the replacement cycle due to the Windows 11 upgrade would boost PC demand this year. However, ongoing macroeconomic uncertainties, such as tariffs, combined with the lack of immediate demand from the AI PC, which had been seen as a savior for the market, have led to prevailing analyses suggesting insufficient support for demand. Samik Chatterjee, a researcher at JPMorgan, commented, "This HP performance underscores that the demand from consumers and corporations for IT devices, excluding AI, is facing challenges due to a tough macroeconomic environment."