Key Takeaways
- Mizuho Securities upgraded DELL’s price target from $180 to $215 while maintaining its Outperform rating.
- Dell’s projected AI server market share is expected to expand from 19% in 2025 to 25% by 2029.
- Super Micro (SMCI) saw its price target reduced to $25 from $33 due to regulatory challenges, not demand concerns.
- Cloud provider capital expenditures are forecasted to reach $689 billion in 2026, representing 64% growth year-over-year.
- The AI server market is anticipated to reach $862 billion by 2029, with a 44% compound annual growth rate from 2024.
Mizuho Securities started the week with an optimistic outlook on Dell Technologies, elevating its price target from $180 to $215 while maintaining its Outperform designation. This upgrade signals increased confidence in Dell’s ability to seize expanding opportunities within the artificial intelligence server sector.
Vijay Rakesh, the firm’s lead analyst, highlighted accelerating capital investment among major technology corporations as a primary catalyst. Cloud infrastructure provider capital expenditures are projected to hit $689 billion in 2026, marking a substantial 64% increase from the previous year, with expectations climbing to $811 billion by 2027.
Dell stands to gain significantly from this investment surge. The company’s AI server backlog currently totals approximately $85 billion across five quarters. Mizuho has revised its AI server order projections upward to $53 billion for fiscal 2027 and $68 billion for fiscal 2028, compared to earlier forecasts of $50 billion and $61 billion respectively.
The company’s shares have appreciated 39% year-to-date and have soared 148% over the trailing twelve months. With a P/E ratio of 20 and a PEG ratio of 0.53, Mizuho considers the valuation compelling given the anticipated growth trajectory.
Explosive Growth in AI Server Market
Mizuho has increased its 2029 AI server shipment projection to 5.67 million units, a significant revision from its previous 3.67 million unit estimate. Total AI server market value is forecasted to balloon to $862 billion by 2029 from approximately $140 billion in 2024, representing a robust 44% compound annual growth rate.
Demand is diversifying beyond traditional hyperscale customers. Enterprise organizations, emerging cloud service providers, and government-backed data centers are all ramping up infrastructure investments as agentic AI applications proliferate. Rakesh emphasized that “all key customers indicate continued willingness to stand up additional AI server clusters.”
Dell’s competitive position in the AI server space is strengthening, with market share anticipated to climb from 19% in 2025 to 25% by 2029. This expansion comes largely at the expense of Super Micro and Taiwanese original design manufacturers such as Foxconn and Quanta Computer.
Evercore ISI independently upgraded Dell’s price target to $205, also maintaining an Outperform rating, pointing to sustained strength in CPU-based server demand.
Super Micro Faces Regulatory Headwinds
Super Micro received contrasting treatment from analysts. Mizuho maintained its Neutral stance on SMCI while lowering the price target from $33 to $25—though the reduction stems from legal complications rather than fundamental demand weakness.
Federal prosecutors charged a Super Micro co-founder and two associates with allegedly redirecting servers to China in violation of export control regulations. The company itself was not indicted. SMCI shares have declined 21% year-to-date, currently trading near $23.31.
Rakesh observed that short-term regulatory uncertainty might redirect some customer orders toward Dell, but emphasized that Super Micro’s long-term prospects remain solid given the robust expansion in AI infrastructure investment.
SMCI shares edged up 0.4% in premarket trading Monday, while DELL advanced 2.95%.
