(Bloomberg) — Dell Technologies Inc. reported worse-than-expected sales after a nascent recovery in the PC market stalled.

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Revenue in the fiscal third quarter rose 10% to $24.4 billion. According to Bloomberg, analysts on average estimated the value at $24.6 billion. Dell’s PC business fell 1% to $12.1 billion, falling short of estimates.

The PC market has seen a historic decline in recent years after a surge in demand for new laptops in the early months of the pandemic, when students and corporate employees were stuck at home. While there were early signs of recovery this year, shipments fell again in the third quarter, industry analyst IDC said in October.

Dell is best known for its computing business, but the Round Rock, Texas-based company is enjoying a renaissance of investor interest because of its powerful servers for artificial intelligence workloads. Earlier this month, Dell announced that it would build servers using Nvidia Corp.’s new Blackwell semiconductors. to the cloud infrastructure provider CoreWeave.

Infrastructure revenue, including servers, rose 34% to $11.4 billion in the period ended Nov. 1, the company said in a statement on Tuesday. That’s slightly more than the $11.3 billion expected by analysts. Dell shipped $2.9 billion worth of AI-optimized servers this quarter, according to notes prepared for the company’s earnings release. That beat analysts’ average estimate of $2.8 billion.

“AI is a huge opportunity for us and shows no signs of slowing down,” Chief Operating Officer Jeff Clarke said in the statement. He announced that AI server orders reached $3.6 billion in the quarter, with growth “across all customer types.”

Shares fell about 5% in extended trading after closing at $141.74 in New York. The stock is up 85% this year, largely due to its new AI server division. Investor expectations for Dell are high in terms of earnings, wrote Erik Woodring, an analyst at Morgan Stanley.

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