Key Takeaways
- Mizuho Securities elevated DELL’s price target from $180 to $215 while maintaining its Outperform rating.
- The company’s AI server market share is expected to expand from 19% in 2025 to 25% by 2029.
- Super Micro (SMCI) saw its target reduced to $25 from $33, driven by legal complications rather than demand concerns.
- Cloud provider capital expenditure is projected to reach $689 billion in 2026, representing a 64% annual increase.
- AI infrastructure spending is forecast to surge to $862 billion by 2029, reflecting a 44% compound annual growth rate from 2024.
Mizuho Securities began the week with an optimistic outlook on Dell, increasing its price objective to $215 from the previous $180 while maintaining an Outperform designation. This upgrade underscores strengthening confidence in Dell’s ability to seize a larger portion of the expanding AI server marketplace.
Analyst Vijay Rakesh from Mizuho highlighted escalating capital investment from major technology corporations as a primary catalyst. The firm projects cloud service provider capital expenditure will reach $689 billion in 2026, marking a 64% year-over-year jump, with consensus estimates for 2027 reaching $811 billion.
Dell stands to benefit significantly from this infrastructure spending surge. The company’s AI server backlog currently totals approximately $85 billion across five quarters. Mizuho has revised its AI server order projections upward, now forecasting $53 billion for fiscal 2027 and $68 billion for fiscal 2028 — increases from previous estimates of $50 billion and $61 billion respectively.
Shares have rallied 39% year-to-date and soared 148% over the trailing twelve months, currently trading at a P/E ratio of 20 and a PEG ratio of 0.53, metrics Mizuho considers compelling given the anticipated growth trajectory.
AI Infrastructure Market Expansion Accelerates
Mizuho has revised its 2029 AI server shipment projection to 5.67 million units, up substantially from its earlier forecast of 3.67 million units. Total AI server expenditure is anticipated to climb to $862 billion by 2029 from approximately $140 billion in 2024 — representing a 44% compound annual growth rate.
Demand drivers extend beyond hyperscale cloud providers. Smaller cloud operators, enterprise customers, and sovereign data center initiatives are all expected to accelerate server acquisitions 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 AI servers is forecast to strengthen, with market share climbing from 19% in 2025 to 25% by 2029. This growth is expected to come largely at the expense of Super Micro and Taiwanese original equipment manufacturers including Foxconn and Quanta Computer.
Separately, Evercore ISI increased its Dell price target to $205 while maintaining an Outperform rating, highlighting sustained momentum in CPU-based server demand.
Legal Challenges Impact Super Micro Outlook
Super Micro faced a contrasting assessment. Mizuho maintained a Neutral stance on SMCI and lowered its price target to $25 from $33 — though the reduction stems from regulatory complications rather than weakening AI server demand fundamentals.
U.S. authorities filed charges against a Super Micro co-founder and two additional individuals, alleging they illegally redirected 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, currently trading near $23.31.
Rakesh observed that near-term legal uncertainty may divert some customer orders toward Dell, though he maintained that Super Micro’s long-term prospects remain solid given the robust expansion in AI infrastructure investment.
SMCI climbed 0.4% in premarket trading on Monday, while DELL advanced 2.95%.
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