Key Takeaways
- Mizuho Securities upgraded Dell’s price target to $215 from $180 while maintaining its Outperform rating.
- Dell’s share of the AI server market 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 legal complications, not demand weakness.
- Cloud provider capital expenditure is projected to reach $689 billion in 2026, representing a 64% year-over-year increase.
- The AI server market is expected to reach $862 billion by 2029, with a 44% compound annual growth rate from 2024.
Mizuho Securities started the trading week with an optimistic outlook on Dell, increasing its price target to $215 from $180 while maintaining an Outperform rating. The upgrade signals strengthening confidence that Dell is strategically positioned to expand its presence in the rapidly growing AI server sector.
Analyst Vijay Rakesh from Mizuho highlighted escalating capital expenditures among leading technology giants as a primary catalyst. The firm projects cloud service provider capex will reach $689 billion in 2026, marking a 64% increase year-over-year, with consensus estimates 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 across five quarters. Mizuho has revised its estimates upward, now projecting AI server orders of $53 billion for fiscal 2027 and $68 billion for fiscal 2028 — increases from previous forecasts of $50 billion and $61 billion respectively.
The technology company’s shares have gained 39% year-to-date and jumped 148% over the trailing twelve months, currently trading at a P/E ratio of 20 and a PEG ratio of 0.53, which Mizuho considers compelling given the anticipated growth trajectory.
AI Server Market Expansion Accelerates
Mizuho has increased its 2029 AI server shipment projection to 5.67 million units from its earlier estimate of 3.67 million. The total addressable market for AI servers is anticipated to hit $862 billion by 2029, up from approximately $140 billion in 2024 — representing a 44% compound annual growth rate.
The demand surge isn’t limited to hyperscale customers. Smaller cloud service providers, enterprise organizations, and sovereign data centers are all expected to ramp up server acquisitions as agentic AI applications proliferate. Rakesh observed that “all key customers indicate continued willingness to stand up additional AI server clusters.”
Dell’s positioning in the AI server landscape is forecast to strengthen, with market share climbing from 19% in 2025 to 25% by 2029. This expansion is expected to come at the expense of Super Micro and Taiwanese original design manufacturers including Foxconn and Quanta Computer.
Separately, Evercore ISI increased its Dell price target to $205 while maintaining an Outperform rating, pointing to sustained strength in CPU-based server demand.
Super Micro Faces Legal Headwinds
Super Micro received contrasting treatment from analysts. Mizuho maintained a Neutral stance on SMCI and lowered its price target to $25 from $33 — though the reduction stems from legal challenges rather than deteriorating AI server fundamentals.
Federal authorities have filed charges against a Super Micro co-founder and two additional individuals, alleging they illegally diverted servers to China in breach of export control regulations. Super Micro as a corporate entity was not charged. SMCI shares have declined 21% year-to-date, trading near $23.31.
Rakesh acknowledged that immediate legal uncertainty might redirect some orders toward Dell, but emphasized that Super Micro’s long-term prospects remain solid given the robust expansion in AI infrastructure investment.
SMCI shares rose 0.4% in premarket trading Monday, while DELL advanced 2.95%.
