Dell Technologies Inc. ($DELL)

Okay. All right. Good. Sorry about that, everyone. Well, hello, and good morning to you all. Welcome to our View From the Top CEO Call Series. I'm honored to welcome back Founder, Chairman and CEO of Dell Technologies, Michael Dell, on this View From the Top Series Call. Michael is joining us again for the third time. So we're especially privileged to have him on this call. Before we get started, I do need to mention that disclosures as related to the individual companies or securities discussed on the call today can be found on the call invitation. Additionally, this presentation contains forward-looking statements, which Dell Technologies' current expectations. These statements involve risks and uncertainties that could cause actual results to differ materially. Factors that could cause results to differ are discussed in Dell Technologies' periodic reports on Forms 10-K or 10-Q filed with the SEC. Any forward-looking statements made today are based on assumptions as of today, and Dell Technologies undertakes no obligation to update them. We have a lot of ground to cover here today. We're going to talk through, hopefully, a broad breadth of topics, including AI, memory, PCs, cap allocation, lots of exciting stuff to cover here with Michael. So as you all know, and Michael really needs no introduction. But Michael really started founded Dell Technologies with $1,000 in 1984 at the age of 19. He became the youngest CEO ever to earn a ranking on Fortune 500. He has navigated many cycles, lots of portfolio changes, including the acquisition of EMC, the go private transaction back in 2013, spinning out VMware in 2021, Systems buying and selling somewhere here and there. And now we are connecting the company for the age of AI. And beyond sort of the success in business, Michael, alongside his wife, Susan, founded the Michael and Susan Dell Foundation in '99 based on really expanding opportunity through initiative spanning education, health and family economic stability. And most recently, I'm sure you've all seen the foundation announced a $6.25 billion philanthropic commitment to help seed investment accounts for 25 million U.S. children, and that was incredibly generous, Michael, and we hope many others will follow your lead here, the lead this next generation to success. That's just really incredible. So we're really fortunate to have you here. Welcome, Michael. We really appreciate you taking the time to be with us here today.

Well, thank you, Wamsi. Great to be with you, and thank you for the kind introduction. Happy to discuss all this.

Well, thank you so much, Michael.

So to get started, you have reinvented Dell from PCs and peripherals to server storage, networking and now AI. And do you seem them pretty all-in on AI now with revenues growing to 1/3 of the company in just 3 years. So how do you see AI changing the tech landscape? And what do you see as Dell opportunity here?

Yes. I think you have to step back and understand that we are shifting from calculating and computing to thinking intelligence, which is just a fundamental change. And the value of that and the opportunity for that is enormous. And certainly, if you look at our AI server business went from $2 billion to $10 billion to $25 billion. We're expecting $50 billion this year. We're still in the steep part of the S-curve adoption of the technology. We have 4,000-plus customers using these AI factories. And look, I think if you think about sort of this thinking intelligence platform, you've got a $114 trillion economy. If you get a little bit of productivity improvement with the AI tools, it's worth an enormous amount. And so while there's a ton of investing going on here, it's at least possible that the world is under-investing in this given its potential, and it turns out that you need a lot of what Dell Technology has built over 42 years in terms of infrastructure, capability, server, storage, networking and the support and services and supply chain, et cetera, to be able to deliver that. And I think maybe 10% of customers, maybe 15% sort of understand what this can do, and the rest of them are still figuring it out. It takes time for all this to kind of happen in the real world. I also think there are distinct phases of it. There's kind of the tools phase, which is what most people are doing. They're adding a tool here and there, and it helps people do their job and be more productive. That's great. There's a whole another phase of this which is really reimagining the workflows in companies. And this is very, very different than tools, right? It involves really rethinking how you get to a given outcome. And in many cases, this is just a big change inside companies. Again, it doesn't happen quickly, not easily, but you sort of go from let's say, a 10% or 20% or 30% improvement with tools to a 10 or 20 or 30x improvement and there's certainly sidings of hundreds of x improvement in various processes and outcomes where you're just doing it very differently with agents and recursive self-improvement and all of that. So super exciting time and certainly, there's a lot of demand for what we do.

Yes. No, that's incredible and so many things to touch on over there. Maybe let's start with sort of the comment you made about potentially underinvesting. I mean a lot of investors are worried about hyperscaler CapEx budgets that probably exceeded anyone's forecast from 2 or 3 years ago. And these companies have gone from a capital light to capital heavy model, which is pressuring their own cash flows at the moment. So how do you see the sustainability of this CapEx cycle? And how do you position Dell if the spending on AI was to either accelerate or decelerate?

Well, it's certainly not decelerating to tell you that. We took $64 billion in orders in the past year. The opportunity and the pipeline keeps growing. And to be clear, we're not putting it on our balance sheet. We're still operating with a capital-light model. When I talked about the hyperscalers, each of them view this as an existential issue for their business. And so they're all investing super aggressively. And again, I sort of go back to the size of the services economy and the demand. What I can tell you is that when we deploy this infrastructure, time to first token is incredibly important because they're putting the infrastructure to work immediately and it gets consumed. And so there is just a ton of demand here. I still think we're in the early stages of the adoption of OS. And we haven't even gotten to agents and the physical AI and recursive self-improvement. And so certainly, there are going to be ups and downs here, but we feel we're well positioned. I mean, we don't actually make any commitments until we have actual orders. And I think we've been pretty careful in managing our sort of capital commitments and demand supply to make sure that we're ultimately converting this into free cash flow, which is what we focus on every day.

Yes. Yes, that's very clear. In some ways, this unprecedented CapEx and demand for AI data center build-out, it's just creating a lot of tightness across the supply chain, whether it be from labor to cooling equipment and memory, just to mention a few. So where do you see the biggest bottlenecks? And what are some of the opportunities and risks associated with these from Dell's standpoint?

So -- we kind of love it when there's a supply chain challenge because that's kind of -- it's kind of like the super role for us. We're ready for that. So -- yes. I mean you have to understand that while you can easily identify, let's say, 10 or 20 suppliers that work with Dell, there's actually thousands and thousands of it, right? And so it's a complex thing. We have built a supply chain machining and it's built on relationships. Obviously, we took our guidance up a lot. We have the supply for our guidance. We're out looking for more supply. And -- if you just get back to what's going on here, there is extraordinary demand growth across the industry. And so you've got all sorts of constraints. One way I would describe the memory issue is, I would say, memory and advanced silicon it's kind of the 25 x 25. And what do I mean by that? So when NVIDIA came out with the H100, it had 80 gigabytes of high-bandwidth memory. The current part has 288 gigabytes. Next year, you'll hear about parts with a terabyte. And the year after that, you'll hear about parts with 2 terabytes. So from 80 gig to 2 terabytes is 25x more memory per accelerator, okay? And in that time frame, you'll have about 25x more accelerators. So 25 x 25 is 625 times. I know most of you are pretty good at math. And it also takes about 4 years to build a new memory plant, assuming you don't have shells already built and if you wanted to have memory capacity in 2027, you would have made the investments in 2023. Now if we dial back the clock to 2023, you might recall it was a horrible year for semiconductors, particularly memory. Micron, in particular, had negative gross margin percentage. Their sales went in half from 2022 to 2023. And the industry collectively lost $40 billion. A lot of them still have PTSD from that, and they're like scared little puppies. Some of the those went bankrupt. And so they're not -- they're sort of very careful about investing. And then if you go to the logic side, TSMC didn't increase its CapEx in '23 from '22, didn't increase in '24. In '25, they started to increase it, but not enough, they're pretty conservative, and they're sold out. And so yes, there's big supply constraints. The good news is that we are not a monoline company. We can sort of move wafers around across multiple product families. And again, we've had relationships. I mean Jeff Clarke's relationships and my relationships with these companies go back literally to the 1980s. And it turns out a lot of these companies are quite relationship-oriented, particularly some of the Asian was. So we feel that the environment advances us and of course, scale. I mean, if you look at our scale, our server and storage business is 4x larger than any single competitor generally, and we're larger the #2, #3, #4, all combined together. And we've also gotten really good in terms of our reaction time in dealing with the changes in cost. And customers also know that we have a supply chain that works. Now Nobody likes it when the price goes up. But even worse is if you can't get supply. And so we feel we're well positioned for this kind of environment.

So that's great. And yes, you guys have demonstrated time and time again when there is supply chain disruption. You guys just somehow managed to out navigate everyone else, and that's just a testament to a very strong supply chain legacy that you've built at the company. I want to come back to memory, Michael. But staying on AI. Your AI revenues have just grown extremely fast, right, like from almost nothing to $50 billion in just a few years. Most of this is Tier 2 CSPs. So when you talk to boards and CEOs, CFOs, how are they framing the ROI for AI? And when do you see enterprises start to maybe more broadly leverage AI and start to hit an inflection point? And really, like maybe broken to that, how does this change the margin and ROIC profile for Dell as you think about those moving pieces?

Well, I would say we're seeing it, Wamsi. I mean there's substantial uptake in enterprise, and it's continuing to grow. Certainly, the margin profiles will be more attractive than the CSPs because they're going to -- they're smaller deals, it tends to be more services and storage and networking. And the lowest cost token is the one that's generated closest to where the data is. And enterprises have figured out that it's a hybrid world, and these tokens are pretty expensive. And again, we haven't even gotten to the whole agent activity. But inference is definitely taking off. And a lot of the use cases are not super complicated and a lot of the smaller models or open models work super effectively. And you probably know that the open models are not that far behind, maybe 6 months behind depending on who you ask. And so we see robust growth in the enterprise. And look, I think companies are going through an understanding here where I would say there's sort of different kinds of companies, right? There's companies that have said, "Wow, this stuff is a total game changer and we better do this or we're going to have a big problem if our competitors do it, and we don't." And then there's other companies that organizations that say, "Well, okay, this is our budget, and it doesn't really matter what's happening in the outside world. We're sticking with our budget, okay?" I mean that will kind of work until it doesn't work. But I think over time, there's going to be fewer of those. If you really believe that this is a game changer, and I put me down for that -- we see it in our own organization. We see it in our own productivity. If you look at our own ROI, if you want to measure free cash flow per person or revenue per person or a gross margin per person or however you want to measure it, there's a ton of ROI here. And it's -- we're, I believe, still at the beginning of this. Also, you need to think about in the past, right, each of us processed data and tasks, and we had projects and tasks and e-mails and things and we sort of do those at human speed and we pass them off to the next person and organizations and technology that are in organizations are a function of what was available at the time they were established, okay? And they get updated from time to time. So now fast forward to, let's say, 2027, we have these agents that are able to process all these tasks, and they work way faster than humans. They're way more accurate, they never sleep. And so you can supervise tens or hundreds of those agents and fundamentally change the way work is done. And so there's just a whole rethinking and reimagining going on inside companies, but that will happen at very different speeds, right? Not every organization is going to be AI filled and just throw everything and redo their company immediately kind of like we are. But I think you'll see more and more of that over time. And you'll see a stark contrast in the performance of companies based on the rate pace of did they do this, I mean -- we're kind of already seeing that.

Yes. No, it seems like the dilute of sort of usage of agents is just starting now, and we're starting to explore what these agents could do and especially after OpenClaw and other recent developments, there's obviously a lot more focus on it.

Yes, that's right. We got from LLMs to reasoning to agents. And now we have this recursive self-improvement and -- if you think it's going to end there, you would be sadly mistaken. It's going to keep going. And a way to think about it is we have this platform for thinking and intelligence. And you're going to see a significant number of innovations on top of that. And can somebody predict exactly what those are going to be? Not a chance. But hold on, it's going to be exciting.

Yes. No, that sounds very much like I think when we first entered either the cloud era or the Internet or cloud or mobile, like each of these, we did not know this whole ecosystem that would form on top of that, which kicked off like many multimillion dollar businesses. So it seems like there is a lot of innovation yet in store and you guys are going to be obviously part of that. Maybe, Michael, to switch gears a little bit. Unfortunately, world is a little bit on a tumults place and the Middle East turmoil. Do you see any sovereign build-outs that are potentially slowing? Or do you think that now with sort of maybe more of each country looking to secure its own infrastructure, there's more of an urgency to become self-reliant and actually, the demand is becoming even stronger from a sovereign perspective?

Well, geopolitical tension is sort of the root cause for sovereign AI demand. And so let's suppose there's a scenario where there's tension in the transatlantic partnership. Who knows, maybe that would be a thing. Well, all these countries in Europe they don't want to be reliant on U.S. AI or U.S. anything, actually. And so now we remind them that well, actually, we can't make these things without ASML, and there's all these companies in Japan that make all sorts of gases and chemicals and South Korea and Taiwan, and it's not just the U.S. And so -- to your customers, we're dependent on the world to make these things. It's not just the U.S. evolve. But we have extensive factories in Europe. And yes, I think sovereign demand continues to grow some really good partnerships like with Palantir, and customers are looking for the ability to run AI inside their country with their own private data for all sorts of applications. And we've had some great wins there. And think of it as any country in the top 25 GDP, there's some sovereign thing going on there, whether it's a -- whether it's the government themselves or a telco or a separate company that is somehow affiliated or connected back to the government. There's definitely demand for sovereign AI.

Okay. Okay. No, that makes a lot of sense. Maybe Michael, like just looking at your AI server business. I mean, historically, Dell has had fairly significant negative cash conversion cycle and you kind of engineered that whole concept across all PC industry to start with. But as you think about AI becoming such a sizable part, almost as large as the PC business, but probably going to exceed it very soon here. How do you think about whether or not it's important to have this negative cash conversion cycle across your company? Or does it matter in your long-term calculus on how you manage this business as you think about maybe the different sort of capital requirements associated -- working cap requirements associated with the business?

It absolutely matters, and we're super focused on cash flow. And last quarter, our cash conversion cycle was flat sequentially. And we're taking all the best practices that we have and applying that to the AI business. And we're as I said, pretty careful. We don't buy material until we have a PO from customers. And there's some CapEx, but it's on our part, but it's pretty limited and we feel very good about our ability to generate strong cash in this environment.

Okay. Amazing. Maybe one of the questions we get often asked is just around the competitive differentiation in the AI market. You guys have just really taken this to a new level. I mean you're sort of beyond anyone -- what anyone would have expected, the amount of revenue acceleration that you've shown your order book, you just had very strong performance. So -- what is it that's driving that differentiation? I know, Jeff, sometimes you talk about level 11, 12 and deployment in sort of data center you just mentioned, time to first token. It just seems as though you're doing something different. And there is something that stands you apart from a lot of your competitors who are going through several issues of their own, not just execution issues, but other issues beyond that. So as you think about, a, where your differentiation is; and b, what are some of the opportunities given maybe some of the missteps and other issues that are there with other companies? How do you think about that?

Yes. I would say we keep getting repeat orders from the same customers, and we keep winning over the customers that let's say, we're earlier reluctant or had decided to go with somebody else. And there could be many reasons for that. I don't think it's like just one thing. Certainly, we would start with our engineering. I mean we actually do it and lots of it. And it's not just in the compute space. Obviously, storage is a big element of what we do. And we now have our Lightning file system, our power scale object scale, are doing super well. And building the whole system -- building all these systems to be reliable, the networking. Then you get into the deployment installation. We learned a long time ago that if you just ship these things to the customer, bad things happen. So we show up with an army of people and deploy them and install them. And by the way, we get paid for that. And then you have service and support, incredibly important, and these things are deployed in all sorts of places around the world, wherever there's power. We have a broad ecosystem of partners, obviously, our supply chain, DFS comes into play. And look, we've been first to market now with the GB200, with the GB300. And I think the proof is in our consistent execution and customers coming back for more. Jeff, Park and I at GTC, we had a dinner with a bunch of the neo clouds and CSPs, maybe all of them actually were there. He said it was the first time they were all the same place at one time. And the demand from those customers is very strong, and they're happy. They're happy with what they get. I spoke with one of the largest ones this morning. And orders are -- their business is very strong. And look, they know they can rely on us. I mean, I mentioned time to first token. I mean, we build these things ahead of time. These things are unbelievably complicated. And we've sort of perfected the precision logistics and supply chain, engineering, where we can deliver hundreds of these racks in a given week like clockwork and have them show up and within 24 or 36 hours, they're up and running and they're generating money for the customer. So our competitors don't seem to be able to do that reliably. And I would also tell you that Jensen at his various performances, he does a great job on stage and things come up, and it's like, blip, blip, blip, here come all the servers and everything looks fantastic. But it actually doesn't quite work that easily. They have these things called reference designs and the reference designs, I'll let you know a little secret that they don't actually work, and there's a lot of bugs in them. And we find all the bugs. And some of the bugs only they can fix and we tell them about those because only they can fix them. And the rest of the bugs that we find that we can fix ourselves without them. We don't tell them about those. And I think that's why we keep winning because we're building a more reliable product at the end of the day, and that comes down to engineering and discipline inside our whole engineering organization. And I think it's very different from other. And look, we do what we say we're going to do. We don't overpromise. We say we're going to deliver it, we deliver it, and it works as reliable and you can count on it. And apparently, the other guys, not so much.

Yes. No, that's a super interesting point, Michael. So when you think about maybe an analogy to industry standard servers where I think maybe a level of complexity is definitely lower and the level of differentiation might be lower. So the ODMs actually have meaningful share in sort of the -- at least at the hyperscalers for industry standard servers. It sounds like the differentiation and the engineering could be so different here with AI servers that maybe the ODMs don't have the same kind of foothold. So the and the Qantas of the world, perhaps don't actually take as much share of the AI server market potentially. Would that be something that you foresee as likely in the future?

Well, the way I would describe it is slightly differently, Wamsi. What I would say is that if you're hyperscale, you can afford to build a massive engineering organization to go and do some version of the kind of work that we're doing. And those companies do work directly with the ODMs. But I don't think there's a whole lot of companies that can do that. And certainly, it would not include the neo clouds. You've got also hundreds of these -- now cloud native businesses that are consuming enormous numbers of tokens. No enterprise customers ever going to try to do that. I mean, you're talking about an enormous engineering effort to do that. And we still have some business with the hyperscalers, although that's not our main priority.

Yes. Yes. No, that makes sense. From a share perspective, right, you clearly have been growing very, very fast in AI servers. How do you think about sort of a natural state of share for Dell in AI servers? And there's been some disruption definitely at some of the other larger peers, so to speak, who kind of struggled with various issues beyond execution. Do you -- in times past, has Dell been able to capture incremental share because of those sort of worries and not just sort of on a temporary basis, but more structurally over time?

Yes. We've got some phone calls recently -- phone calls from some customers. I think in the enterprise, we're certainly advantaged there. And just don't see the other competitors as much there. And I don't really know on the share. I mean we're often asking the question how high is up in terms of the size of the opportunity because we just keep seeing incredible ways of demand and the lead times keep getting longer and the orders keep coming in. So we're basically seeing some super robust forecast for future demand and responding accordingly. But in core servers and storage, as I said earlier, we are quite a bit larger than others. And we seem to be growing. So...

Yes. Yes. No, for sure. Going back to...

I think we're still in the early stages of agents and multi-agent systems and recursive self improvement that will drive demand even further.

Yes. Yes. No, that makes a lot of sense. Going back maybe to, Michael, to your point earlier about sort of the near-death experience these memory companies have and had in like back a few years ago, 3 years ago. And now looking at sort of where we are with memory price inflation. It sounds like not much new capacity is going to come online, I think, overnight. Samsung reported some preliminary numbers, extremely strong memory price increases both in DRAM and NAND for Q1, Q2 expected. So can you maybe -- like I think people were very surprised to see your fiscal year guidance because people felt like with this memory price escalation, I mean, there is no way that anyone can navigate that to not have a down year-on-year for earnings. You had sort of committed to a long-term framework of 15% plus EPS growth. And frankly, you've driven higher than that now, we're talking about 25% earnings growth in this fiscal year, which is just astounding. So is it like maybe you have explained to investors that the secret sauce behind your ability here to overcome this intense margin pressure that the rest of the industry is seeing. And I'm sure, you're seeing increased costs as well, but you're somehow able to navigate it much better than others. So what's actually happening behind the covers? What are some of the levers that you are using in maybe across your business lines that is helping more than offset the challenges of memory price increase?

Well, so -- it should be super surprising that we're raising prices to protect gross margins and we're very agile in doing that. So we're able to execute that very quickly. And we kind of saw what was happening, and we made appropriate changes. The other thing is going back to what I said earlier, we're in a good spot in terms of supply. Everyone is subject to the price increases. But again, let's say you're at Bank of America or whatever bank you want to pick or whatever a customer, it would be bad if the price of memory went up, but it would be worse if you couldn't get any, right? And so we've translated that situation into a successful outcome. I'll say there's probably some trade craft in there that I'm not going to explain but we're doing very well in this environment.

Michael, you mentioned sort of off price increases. And obviously, some of this is pretty visible externally, the industry standards over pricing has gone up 30% to 100% in some SKUs. There's been significant price increases across the board. So -- when you think about the impact of these price increases on customers, what sort of buying activity are you thinking? How does that change the buying activity as these customers? Do we anticipate a pull forward of demand? Or is the demand so strong and the value proposition of replacing the server, so great that we're going to see continued demand? Or is it like given your secret sauce and trade craft like you're able to take share, so even though there might be a pull forward in the first half, your share gains in the second half will let you do better than the rest of the industry. Like can you frame how to think about how the customer demand might be changing and the seasonality of that could be changing because of what's happening with memory prices and your price increases?

Yes. I'm sure there's some pull forward, but we don't know how much. We also know that there are some customers who will say, "Oh, the price has gone up too fast. I think I'm going to wait for it to come down, right?" And who knows, maybe it will come down. I mean I'm sure at some point of but probably not -- it doesn't look like it's happening anytime soon. So the problem, of course, is you can delay the purchases for a while, and there is some demand destruction certainly in low-end phones and low-end PCs. But there are about 1/3 -- about $500 million of the 1.5 billion PCs in the world are 4 years old or older, okay? And so if you work at a company, let's say, with knowledge workers and now you've got a 4-year-old PC, this is a bad situation, right? And so you're paying somebody $100,000 or whatever to do their job, and they've got this decrypted tool that doesn't work very well, and they know it. And so -- yes, maybe you don't like that the price went up, but eventually, you're just going to pay the price. I mean you can delay, can defer, but so -- yes, it's always a question of when are they going to buy, not if they're going to buy. And then with servers, we still have the majority of our installed base of servers are 14G or older. We're on 17G now. So that's a 7:1 consolidation benefit. And so I think customers are starting to figure out, you're going to -- your budget for tokens has to go up. And so this just costs money. I mean, obviously, we've put all this into our guidance and -- with respect to the second half. But -- yes. I mean, I do think these are the kind of environments where we tend to gain share. And I also think different from the kind of 2020, 2021 cycle, you've also seen us scale our cost structure in a pretty extraordinary way. So we're kind of fit to fight here for the future.

Yes. Yes. No, great point. Michael, you mentioned, obviously, some of your relationships with these memory companies go back 4 decades. When you think about what the hyperscalers are doing, they're starting to try to have long-term agreements with a lot of these parts of the supply chain, whether it be components, whether it's memory, whether it be optical and they're investing aggressively into these companies in some ways. And so you've obviously done a phenomenal job you're just saying that, hey, you've got enough supply to take care of your guidance and you're trying to get more supply. So -- is there -- as you think about your discussions with the suppliers, is that changing in any way because of what these hyperscalers are trying to do, which is just really go in and try to lock up as much supply as possible?

I mean what I'd say is we have had long-term agreements with a lot of these companies going back decades, and we continue to. Obviously, the nature of those adjust given the environment and the demand from the overall industry. Also, I think you have to understand this whole intelligence thinking platform, it just uses memory in a very different way. And so that's a big change here. It's a lot less expensive to take a token that's already been generated and store it. And pull out of memory, then to regenerate it. And so you end up with a much faster-growing sort of pyramidal system of memory from SRAM inside the logic to high beer with memory to DRAM to SSDs to ultimately rotating storage still around. And so -- yes, we have agreements with them. The demand is extraordinary. We have the supply for the demand that -- for the guidance that we've provided for the year and we're working on getting more.

And generally, from your perspective, the flavor of these long-term agreements that you've had is generally where there is a supply guarantee for Dell and then pricing could be some variable nature. Is that the right way to understand sort of most of these longer-term agreements? Or would you characterize that as not right?

Yes, that's generally right. I mean, I think also while some of them could be very opportunistic in periods like this. They're also quite concerned with the long-term health of their business, and who the offtakers are over time. So what do I mean by that? These guys are investing tens of billions of dollars in these plants. And they want to know how they're going to sell their parts in next quarter or two, sure. But they really want to know how they're going to sell them in the next 3, 5, 7, 10 years. And we've always been a predictable, reliable, let's say, low volatility customer, right? We don't show up where there's a disaster and say, "Oh, we've got to have a to bunch of memory," we're there all the time. And we've been there all the time. And so that, I think, is super helpful and also just the breadth of our demand signal and the quality of our demand signal is appreciated. And these guys have been whipsawed in the past by the hyperscalers where they overbuild then the hyperscalers turn everything off and stop buying. That does not happen with our demand. Our demand is a lot more stable and that's appreciated. And that's part of the relationship. But also we treated them like long-term partners, and they've generally reciprocated.

Yes. Yes. No, that's a great point. Times flying. We only have 5 more minutes here, and there's so much more to talk about. So -- maybe quickly here, I do want to touch upon what Dell is doing internally with AI. You mentioned Agentic AI, you mentioned sort of productivity, different metrics, whether you look at it on a per employee profit metric, revenue metric. What are you doing with Agentic AI within the organization? And where are you in that deployment like sort of cycle?

So I would say -- we're rapidly hurtling towards it. And if you look at our modernization, we've been on this theme for several years, you've been hearing us talk about it. Our OpEx has come down for 4 years in a row, which is pretty unusual. And -- this kind of started going in 2023, and we think there's still more to go and significant scaling benefits. And we guided OpEx to a single-digit percent of revenue that hasn't happened in 20 years. And of course, we have an even more intense -- R&D intensive business than we did 20 years ago. It's 100% structural. There's tons of opportunity and we're doing this while we're investing in our R&D, in our sales capacity, in our support and in our supply chain. So I would say I'm super bullish on our ability to generate productivity. And ultimately, that makes us a much more competitive company opens up paths to profitable growth kind of as you've been seeing. So...

Quite amazing. I mean -- yes, adding $30 billion more on top line with very little incremental OpEx, so quite amazing. Maybe in the few minutes that we have left, on a prior call, I think with me, you said you are the ultimate long-term investor. How do you define success for Dell in the next 10 years?

I would say, the last 5 years, we outperformed the MAG7 with the exception of NVIDIA. But in aggregate, we outperformed the MAG7, including NVIDIA. But we have performed every component, except NVIDIA. Certainly, we look at our relative performance to the S&P IT index. And we see tremendous opportunities to continue to grow, generate strong cash flow. You've seen our capital return policy has been super shareholder-friendly. Buying back stock, we bought back 54 million shares of our stock. We increased the dividend by 20%. And I think you'll see us continue to generate strong revenue earnings growth, free cash flow and the business should be a whole lot more valuable. And certainly, if we -- certainly, we would endeavor to outperform all the relevant benchmarks by a lot.

Yes. You mean -- you are -- continue to be a technologist at heart, and you have taken this company from basically you starting it to this amazing scale of now $140 billion a year in revenue with very fast earnings growth. So I can see you're very excited about the future of Dell. Any final thoughts for investors why they should be just as excited as you are?

Yes. So in the last the 5 years, right, we doubled EPS, 15% EPS growth. And we talked about that as our long-term framework for the next 5 years. ISG is super well positioned. Obviously, you know about our guidance for this year, our portfolio has never been in better shape. Our operating model is super strong. We've got relationships with customers and supply chain. And we have a ton of levers in this business to drive EPS and cash flow and shareholder return. So I feel very good about the future opportunities for our company.

Amazing. Well, Michael, we really appreciate your time. This has indeed been a great discussion. I always love your insights. I love the work you're doing for our country, for the future. just incredible always to speak with you, and it's been an honor and a pleasure to look forward to catching up with you again. And thank you so much for all your time and your insights.

Thank you, Wamsi. Thanks, everyone, for joining us today. Take care. Bye-bye.

Thank you, everyone.