Mizuho Raises Estimates for Dell Technologies

Mizuho analysts have raised their estimates and price target for Dell Technologies (NYSE: DELL), noting its expanding presence in the AI server market driven by NVIDIA (NASDAQ: NVDA).

Market Growth

NVIDIA leads the charge toward a projected $2 trillion data center AI infrastructure (DCAI) opportunity by 2028-29. Mizuho emphasized that NVIDIA’s Blackwell GPUs and new products such as the NVL72 and GB300A are increasing average selling prices (ASPs) for servers and transforming the market landscape.

Dell's Position

According to Mizuho, "Dell is gaining share in AI servers as capex percolates and NVDA GPUs supply expands to Tier 2 CSPs and Enterprise/Sovereign customers.” This trend is anticipated to bolster Dell's market position significantly through 2025.

Shipment Projections

The analysts also pointed out the rapid acceptance of NVIDIA’s GPUs, including the ongoing Blackwell ramp, which may align with NVIDIA’s January quarter guidance. Mizuho estimates that shipments of 150,000-200,000 GB200 GPUs could result in $7-8 billion in revenue upside for NVIDIA—a favorable outlook for Dell as it integrates key systems in the evolving AI server sector.

Future Market Expansion

Looking towards the future, Mizuho forecasts substantial market growth:
– Tier 2 CSP and Enterprise/Sovereign will account for roughly 48% of AI server spending by 2027E, within a total market spend of $300 billion.
– This segment alone is expected to grow at a 42% CAGR from 2024 to 2027.

Strategic Positioning

Dell's strategy of competitive pricing and an expanding GPU portfolio positions it well to take advantage of these market transformations. Mizuho also pointed out the potential for Dell to secure future orders from major companies like Apple (NASDAQ: AAPL) as the AI server market undergoes rapid growth.