00:00 Speaker A
One thing I have to give Dell a lot of credit here is that they manage their supply chain extremely efficiently. It’s not just that, it’s just the process of getting the product to market, right? Therefore, direct business is possible. When customers are in charge of configuring their PCs, they have many options to shape demand.
00:19 Speaker A
It can be done based on the inventory they have, they can set price differentials, and in some cases they can close, narrow, or widen the gap from one configuration to the next to move customers in either direction. And this is very important in managing the supply chain, and it’s much more real-time in managing the supply chain.
00:44 Speaker A
So, in a sense, Dell is showing once again that it has the ability to flex this supply chain power and be able to weather very difficult situations like the market environment. And we saw this during COVID-19 and we saw this in 2017 when memory prices went up.
01:03 Speaker A
So they have a history of managing their supply chain very well and, you know, we’re very bullish on the fact that they’ve continued to navigate and give people confidence that they can continue to navigate in the future.
01:20 Speaker A
One thing is very clear from this quarter itself, right? The demand for AI remains very strong. They revised their forecast for AI sales upwards to 20 billion to 25 billion for the current fiscal year, which ends in January.
01:34 Speaker A
But looking to next year, I think they’re in a position to even double their AI revenue. And, you know, this went from a small amount two years ago to $25 billion this year and potentially $50 billion next year.
01:50 Speaker A
And I think what makes Dell so interesting is the interesting position that Dell is in. That’s because the market is moving squarely toward change in Dell’s strengths: AI servers, storage, and enterprise data architecture.
02:08 Speaker A
This is about AI PCs, which will become more and more of a focus in the future as the software can be priced differently on the cloud and on the device. We have a great cash conversion cycle and we manage our supply chain.
02:26 Speaker A
Yes, we remain very bullish on Dell.
