Dell Technologies has experienced a remarkable surge in its stock value, reaching unprecedented highs, fueled by the market’s growing interest in artificial intelligence (AI) hardware companies. As of late morning trading in New York, Dell’s stock price stands at $131.40, positioning it to surpass its previous record close of $128.58, which was achieved just the day before. Over the course of the past five trading days, Dell shares have witnessed an impressive rally of more than 20%. Year-to-date, Dell’s stock has soared by an astounding 72%, and over the past 12 months, it has skyrocketed by an impressive 227%, aligning closely with the surge observed in Nvidia shares during the same period.
While Dell’s performance may not have quite matched the extraordinary growth of Super Micro Devices, a prominent server provider whose stock has surged by 261% this year, both companies are benefiting from the same underlying driver: the burgeoning demand for AI technology and infrastructure.
Dell’s strong financial performance in the January quarter, announced on Feb. 29, surpassed expectations, driven primarily by robust demand for AI servers powered by Nvidia H100 chips. The company reported a substantial increase in its backlog of orders for AI servers, which reached an impressive $2.9 billion by quarter-end, marking a significant uptick from $1.6 billion in the previous quarter and $800 million two quarters earlier. Additionally, Dell highlighted a strong pipeline of interest in AI servers, suggesting the potential for continued growth in this segment. Moreover, Dell indicated increasing demand for servers equipped with AMD’s pending MI300 GPU and the next generation of Nvidia chips.
Looking ahead, Dell anticipates the arrival of AI-enabled PCs, slated to become available later this year. Dell’s Vice Chairman and COO, Jeff Clarke, predicts that by the end of the January 2025 fiscal year, one out of every five PCs sold by Dell will boast AI capabilities, with the potential for this figure to double by the end of fiscal 2026.
In addition to AI servers and PCs, Dell’s enterprise storage segment presents another area for potential growth. Despite a 10% decline in this segment in the most recent quarter compared to the previous year, Dell sees promising signs emerging from the expansion of AI data centers, which are driving increased demand for storage products. Dell reported higher-than-usual storage orders in the last quarter, and anticipates revenue growth in its Infrastructure Solutions Group, driven by a resurgence in both storage and traditional servers.
Similar positive trends are observed across other players in the infrastructure space. For instance, Micron Technology highlighted the surge in demand for solid-state drives (SSDs) propelled by AI data centers, reporting a 100% increase in enterprise SSD sales in the latest quarter compared to the previous year. This upward trajectory not only augurs well for Micron but also signals a favorable outlook for Dell and other storage vendors, amidst a backdrop of burgeoning demand for AI-driven infrastructure solutions.