Analysts at funding agency Evercore ISI raised their worth goal for Outperform-rated Dell (NYSE:) to $165 from $140 in a notice Thursday, stating that they imagine the corporate has received a big portion of enterprise for Tesla’s AI server buildout.
In accordance with Evercore, this ought to be incremental to their present ~$2.9 billion AI backlog however was seemingly embedded of their pipeline commentary.
“Tesla (NASDAQ:) has indicated that they expect to increase their compute capacity (H100 or equivalents) from ~35,000 H100 or equivalents installed today to ~85,000 by year-end,” explains the agency. “Our analysis suggests this presents a ~$2.5-3.0B revenue/order opportunity for DELL potentially in CY24.”
Moreover, whereas Evercore believes that SMCI has additionally received a number of the Tesla AI server enterprise, the allocations are mentioned to be closely skewing in direction of Dell.
“Crucially, DELL has also won a sizable amount of storage attach in addition to AI servers that could ship in conjunction with AI server shipments (vs. storage typically lagging x86 server deployments by 2-3 quarters),” provides Evercore. The agency believes Dell has positioned itself to aggressively take share of the tier 2 cloud service supplier, sovereign, and enterprise markets for AI infrastructure.
They conclude: “Dell continues to pick up traction for AI servers, and more importantly, AI attach. This should help support a structural lift to Dell’s underlying top-line growth rate from 3-4% to MSD over the next few years.”
