Dell cuts its revenue forecast as Intel’s CPU shortage continues

Dell is one of the world’s largest PC makers, with Intel-powered units making up the majority of its product lineup. While AMD-powered PCs are becoming a larger part of Dell’s product stack, Intel is still king, making Intel’s processor shortage terrible news for the company. 

After the release of Intel’s apology letter for its processor shortage, Dell has lowered its 2019 revenue forecast, causing the company’s stocks to lower by around 5%. Dell says that “Intel CPU shortages have worsened qtr-over-qtr”, preventing Dell from shipping as many PCs as expected. Simply put, Dell cannot sell PCs without processors, and Intel’s inability to meet demand has placed Dell in a position where it can’t meet the market demand for new PCs. 

HP has mirrored Dell’s by stating in its latest earnings call that Intel’s supply shortage was going to constrain sales during the next quarter. This makes it clear that Intel’s supply shortage is having an industry-wide impact on PC sales. 

While Dell has had a strong quarter, with sales rising by 4.6%, its server and networking unit has seen a sales drop of 16%.  Dell has cut its revenue forecast from $92.7-94.2 billion to $91.5-92.2 billion.