(Reuters) - Dell Technologies ( DELL ) forecast annual profit above Wall Street estimates on Thursday, while projecting full-year revenue that was in line with market expectations, in a sign of intense jostling in the AI server market.

The company faces tough competition from rival PC makers such as HP Inc at a time when a sweeping U.S. trade tariff on China could hurt companies by triggering a price increase on tech products.

Research firm International Data Corporation (IDC) on Thursday lowered its traditional PC forecast for 2025 and beyond, driven by U.S. tariffs on China and weakening market sentiment.

Demand for Dell's AI servers has been booming.

"The deals we've booked with xAI and others put our AI server backlog at roughly $9 billion as of today," Dell's Chief Operating Officer Jeff Clarke said.

Dell's AI servers, which are equipped with Nvidia's powerful chips, are designed to handle rising computational demands of training large language models.

The company forecast fiscal 2026 adjusted profit of $9.30 per share, above the average analyst estimate of $9.23, according to data compiled by LSEG.

The $103 billion midpoint of the company's annual revenue forecast came in line with estimates.

Dell also announced an 18% increase in its annual cash dividend and a $10 billion increase in the company's share repurchase authorization.

Revenue for the fourth quarter ended January 31 came in at $23.93 billion, missing estimates of $24.56 billion.

Dell's revenue from its infrastructure solutions group - which includes its storage, software and server offerings - rose 22% to $11.35 billion. Revenue from its client solutions group, which houses PCs, rose 1% to $11.88 billion.