Nvidia's market value skyrocketed with the help of artificial intelligence, while Dell is expected to become the next darling of Wall Street with Nvidia's help.
Both Nvidia chips and artificial intelligence models require carriers to enter the consumer market, making Dell, whose business spans from personal computers to data storage devices to software and other products, undoubtedly another potential winner.
Prior to Dell's quarterly financial report on Thursday, Wall Street aggressively raised the company's target stock price to show optimism about its future profitability.
Bank of America analyst Wamsi Mohan raised Dell's target stock price from $130 to $180, Loop Capital raised Dell's target price from $125 to $185, and Wells Fargo Bank raised Dell's stock price from $140 to $170.
Analysts predict that Dell's server revenue will increase by 31% year-on-year in the fiscal quarter ending in April, reaching slightly over $5 billion, which will be the best growth rate for the department in over four years. Dell's earnings per share are expected to be 57 cents and revenue is expected to be $21.56 billion.
Beneficial Gathering
Compared to the previously popular stock of AMD, which is smaller in scale and focuses on professional artificial intelligence servers, Dell's foundation is more solid and its business is more diversified. This has made Dell's growth more stable and more confident in developing its artificial intelligence server business.
According to research firm IDC, the personal computer market, which accounts for more than half of Dell's revenue, has recently shown signs of improvement. In addition, new computers equipped with artificial intelligence will also enter the market this year, creating conditions to boost demand.
On the other hand, Dell's partnership with Nvidia has deepened Wall Street's expectations for it. Previously, Dell and Nvidia announced the launch of Dell's AI factory, stating that it was the industry's first institution to provide end-to-end enterprise AI solutions aimed at meeting the complex needs of enterprises seeking to leverage AI technology.
Last week, NVIDIA CEO Huang Renxun also appeared on stage with Dell CEO Michael Dell at Dell's annual developer conference, stating that no one is better at building large-scale end-to-end systems for enterprises than Dell.
Goldman Sachs analyst Michael Ng said that Dell servers seem to have priority supply rights in Nvidia GPUs, which means their pressure on chip quantity may be much smaller than their competitors.
In addition, Evercore ISI analyst Amit Daryanani has learned that Dell has won most of Tesla's artificial intelligence server construction business, which will bring it $2.5-3 billion in revenue and be credited in 2024.
Mohan from Bank of America also pointed out that Dell has recently launched its Dell AI factory and expanded its product portfolio through five new AI computers, full flash file storage, network architecture, and AI service products.
He added that considering the demand for artificial intelligence servers, The storage demand driven by IBM's mainframe updates and the demand brought by personal computer updates are all positive, and Dell will usher in "spring" next year.