Dell Technologies Inc. (DELL) has surpassed Wall Street expectations in its recent fiscal fourth-quarter earnings report, thanks to the increasing demand for artificial intelligence infrastructure solutions.

The company recorded adjusted earnings of $1.91 billion, translating to a remarkable $2.68 per share, a significant rise from the previous year’s $1.66 billion or $2.27 per share, exceeding forecasts. Its revenue totaled $23.9 billion, marking a 7% year-on-year increase, although it fell slightly short of analyst expectations as per Visible Alpha. This growth was fueled by a 37% surge in server and networking revenue, reaching $6.6 billion, primarily driven by demand for AI technologies and traditional server solutions.

Earlier this month, Bloomberg reported that Dell is in negotiations to sell over $5 billion worth of servers equipped with Nvidia (NVDA) chips to Elon Musk’s artificial intelligence venture, xAI. This is not their first collaboration; previously, Musk and Dell’s leadership announced last summer that Dell would supply hardware for an AI “supercomputer” project intended for Memphis, Tennessee.

“We have a promising outlook for AI as we expand AI capabilities from major cloud service providers into enterprise-level solutions and extend them to edge computing with personal computers,” stated Chief Operating Officer Jeff Clarke in a Thursday press release. “The agreements secured with xAI and others have contributed to our AI server backlog, which currently stands at approximately $9 billion.”

Looking ahead, Dell projects fiscal 2026 revenues between $101 billion and $105 billion, alongside an adjusted EPS of $9.30, in comparison to analysts’ anticipations of $103.81 billion in revenue and an adjusted EPS of $9.28.

Following the earnings announcement, Dell shares rose by 2% in after-hours trading on Thursday, extending their gains to roughly 14% over the past year, up to Thursday’s market close.