Dell Technologies Inc. (NYSE:DELL) Q3 2024 Earnings Call Transcript

Rob Williams: All right. Let’s see if we can get one last question in.

Operator: We’ll now take our final question from David Vogt with UBS.

David Vogt : Can you — Jeff, can you talk to sort of the thought process if AI lead times come in a little bit more next year? What that means for your networking fabric or equipment business? And then ultimately, the pull forward, maybe the pull-through of storage. I might have missed it earlier, but I just wanted to get a sense for how that would sort of impact the rest of the ISG business. And then just quickly on CSG. Can you kind of share with us your thoughts, maybe Yvonne on sort of the margin impact from higher component costs, whether it’s DRAM, NAND or however you’re thinking about it?

Jeff Clarke: Well, clearly, as GPU supply improves, the fabric that is associated with those units will be shipped and aligned to that. So the ability for us in our networking business will benefit from an uplift or an increase in supply. And I think that’s encouraging. And as I talked about, storage attach is important. We are certainly working with our sales teams, working with — to find the opportunities as this data is being created in increasingly greater rates outside of the data center to make sure that we’re there. And it’s landing on Dell storage. And as it lands on Dell storage, making sure that as AI follows the data, that our AI-optimized portfolio is next to it. I mean, that’s the sales motion. A set of professional services around that, a set of services that attach around that.

So think of every opportunity of a model training, fine-tuning ultimately, as we get to inference is an opportunity for compute assets, which drags a set of storage assets around that, and it’s got to be connected. We kind of look at that as the AI estate, if you will, and that’s the opportunity. It’s real, and our teams are focused on it.

Yvonne McGill : And then on your question around component costs and the potential pressure we put on margin rates, we do run a low inventory model. And so when we have component cost increases, we try to recover them as quickly as we can by raising prices and passing those through into the market. So you’ll see us continue with that. It’s certainly not the first time that we’ve had this happen. And so it’s an engine that’s well tuned within Dell. But we’ll have to navigate through that with the competitive environment, and we will. But it usually takes a period of time to recapture that impact of the question.

Rob Williams: All right. Thanks, everyone, for joining us. Yes. Thanks, David. We’ll see many of you next week at Raymond James and Barclays and also the first week in January at the Consumer Electronics Show. Thank you. Have a good evening.

Operator: This concludes today’s conference call. We appreciate your participation. You may disconnect at this time.