Key Takeaways
- Mizuho Securities upgraded DELL’s price target from $180 to $215, maintaining its Outperform rating.
- Dell’s market share in AI servers is expected to climb from 19% in 2025 to 25% by 2029.
- Super Micro (SMCI) received a price target reduction to $25 from $33 due to legal complications, not demand weakness.
- Cloud service provider capital expenditure is projected at $689 billion for 2026, marking a 64% year-over-year increase.
- AI server market spending is anticipated to reach $862 billion by 2029, reflecting a 44% compound annual growth rate from 2024.
Mizuho Securities started the week with an optimistic outlook for Dell, increasing its price target from $180 to $215 while maintaining an Outperform rating. This upward revision signals strengthening confidence that Dell is strategically positioned to expand its presence in the rapidly growing AI server sector.
Vijay Rakesh, an analyst at the firm, highlighted escalating capital investments from major technology corporations as a primary catalyst. Cloud service provider capital expenditure is forecast to reach $689 billion in 2026, representing a 64% year-over-year jump, with projections climbing to $811 billion for 2027.
Dell stands to benefit substantially from this investment surge. The company’s AI server order backlog currently totals approximately $85 billion spanning five quarters. Mizuho has revised its AI server order projections upward, now estimating $53 billion for fiscal 2027 and $68 billion for fiscal 2028 — increases from previous forecasts of $50 billion and $61 billion respectively.
The company’s shares have gained 39% year-to-date and have rocketed 148% over the trailing twelve months, with a P/E ratio of 20 and a PEG ratio of 0.53. Mizuho considers this valuation compelling given the anticipated growth trajectory.
AI Server Industry Expansion Accelerates
Mizuho has revised its 2029 AI server shipment projection upward to 5.67 million units from its earlier estimate of 3.67 million. Total AI server market spending is anticipated to hit $862 billion by 2029, up dramatically from approximately $140 billion in 2024 — representing a 44% compound annual growth rate.
Demand isn’t limited to large hyperscale operators. Smaller cloud service providers, enterprise customers, and sovereign data centers are all expected to ramp up server deployments as agentic AI applications proliferate. Rakesh noted that “all key customers indicate continued willingness to stand up additional AI server clusters.”
Dell’s anticipated market share in AI servers is projected to expand from 19% in 2025 to 25% by 2029, capturing market position from Super Micro and Taiwanese original design manufacturers including Foxconn and Quanta Computer.
Evercore ISI independently lifted its Dell price target to $205, also maintaining an Outperform rating, citing sustained demand in CPU-based server segments.
Super Micro Faces Legal Challenges
Super Micro received contrasting treatment. Mizuho maintained its Neutral stance on SMCI and reduced its price target from $33 to $25 — though the adjustment stems from legal complications rather than deteriorating AI server demand fundamentals.
U.S. authorities filed charges against a Super Micro co-founder and two additional individuals for allegedly redirecting servers to China in violation of export control regulations. Super Micro as a corporate entity was not named as a defendant. SMCI shares have declined 21% year-to-date, trading near $23.31.
Rakesh observed that immediate legal uncertainty might redirect some orders toward Dell, but emphasized that Super Micro’s long-term prospects remain solid given the robust growth in AI infrastructure investment.
SMCI climbed 0.4% in premarket trading on Monday, while DELL advanced 2.95%.
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