(Reuters) -Dell Technologies ( DELL ) raised its annual profit forecast on Thursday, signaling growing demand for its AI-powered servers that are equipped with Nvidia's ( NVDA ) powerful chips.

Companies such as Dell and Super Micro Computer ( SMCI ) have benefited from the growing demand for these servers, but the high cost of producing them and tough competition have pressured margins.

"We generated $12.1 billion in AI orders this quarter alone, surpassing the entirety of shipments in all of FY25 and leaving us with $14.4 billion in backlog," Dell's Chief Operating Officer Jeff Clarke said.

The results follow the U.S. Department of Energy's announcement on Thursday that it would launch a new supercomputer, named Doudna, which will use Dell and Nvidia's ( NVDA ) advanced technology to perform complex computing tasks.

Dell now expects annual adjusted profit to be $9.40 per share, compared with its prior forecast of $9.30 per share. The company reiterated its annual revenue outlook.

It forecast second-quarter revenue to be between $28.5 billion and $29.5 billion, above analysts' average estimate of $25.05 billion, according to data compiled by LSEG.

Dell's adjusted profit forecast for the second quarter of $2.25 per share was also above estimates of $2.09.

First-quarter revenue came in at $23.38 billion, compared with estimates of $23.14 billion.

Dell's revenue from its infrastructure solutions group, which includes storage, software and server offerings, rose 12% to $10.32 billion. Revenue from its client solutions group, that houses its PC business, rose 5% to $12.51 billion.

On an adjusted basis, the company earned $1.55 per share in the first quarter, missing estimates of $1.69.