Dell’s AI-oriented servers, which are providing a boost to sales, come at a cost for margins. CFO Yvonne McGill says on a call with analysts that a higher mix of AI-optimized servers will likely weigh on margins for the year, and the company expects the gross margin rate to decline about 150 basis points. Inflationary input cost and competition are also factors in the gross margin shift. Gross margin declined 250 basis points in 1Q as the company faced steep competition on prices and higher AI server mix. Shares fall 18% to $139.65 post-market.