DELL: AI Server Demand Driving Stock Growth

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This is only a record of my personal analysis and the contents may contain errors or information that differs from the actual situation. Please understand in advance when viewing this site.

Introduction.

Leader in the external sales market for AI serverssuper microcomputeris experiencing remarkable and rapid growth.

As AI services become increasingly popular, the market for AI server infrastructure is rapidly growing in demand, and we focus on Dell Technologies, which is considered the next hot company in this important field.

In this section, we will delve deeper into Dell Technologies' business, its unique strengths in AI servers, and its future prospects.

What is Dell Technologies (DELL) and what is its business?

• Dell Technologies is a multinational computer technology company headquartered in Texas, USA.
• Dell offers a wide range of technology products and services for individuals and businesses, with its primary businesses including desktop computers, notebooks, servers, storage systems, networking products, software, and peripherals.
• Dell also,The company also provides IT solutions to help companies with their digital transformation, including services related to cloud technology, big data analytics, security solutions, and AI technology.This helps clients adapt to technological advances and run their businesses more efficiently. 
• Dell's focus on innovation and a customer-centric approach has impacted a wide variety of industries through its global reach.
  Particularly,The company's focus on the latest technology and high-quality customer service keeps it competitive within the industry.

The following is company information for Dell Technologies, Inc.

• Company Name: P.O. BoxDell Technologies Inc.
• Date of Establishment: (Months)1984
• Name of Representative:.Michael Dell
• Official website:. https://www.delltechnologies.com

What are Dell's (DELL) main products and services?

Dell Technologies' core products and services include

• Personal Computers:. Notebook PCs (Inspiron, XPS, Alienware series, etc.), Desktop PCs (OptiPlex, Alienware, XPS series, etc.)
• Servers and Storage:. Servers (PowerEdge series), storage solutions (Dell EMC product line)
• Networking Products:.Network infrastructure equipment such as switches and routers
• Software and Security Solutions:. Software solutions for enterprise data protection and security management
• Cloud-based services:.Cloud technology services including VMware, Pivotal, and SecureWorks
• IT Consulting and Support Services:. Customer support, technical assistance and consulting services

These products and services target a wide range of customers, from individual users to large enterprises, especially business solutions that help optimize IT infrastructure and digital transformation.

Dell emphasizes technological innovation,In particular, the company is strengthening in the areas of cloud computing and data center technology.

What are Dell's businesses that are driving growth and what are stagnant?

In Dell Technologies' business domain,The sectors driving growth in particular are cloud computing and AI integration solutions.
These technologies have greatly enhanced Dell's revenues and market competitiveness.

On the other hand,Growth in traditional personal computers and basic server products has stalled somewhat as the market maturesIt has been pointed out that the
This is a trend seen throughout the technology industry, with a clear shift toward emerging technologies.

Dell especially,High growth has been achieved in cloud services and AI-based solutions, which remain central to the company's growth strategy.I am sure you will.

In the area of enterprise solutions, the company is also driving innovations aimed at optimizing the supply chain and improving the customer experience, and these advancements are expected to play an important role in the future growth of the business.

What are the strengths and competitive advantages of Dell's (DELL) AI server business?

The strengths and competitive advantages of Dell Technologies' AI server business can be summarized primarily as follows

Provide high-performance hardware

Dell waveThe company offers a high-performance AI server called the PowerEdge XE9680, which is one of the best in the industry.
The server is equipped with two of Intel's latest generation server CPUs, 4th generation Xeon scalable processors, and eight NVIDIA H100 or A100 GPUs.It has very high computational power and is capable of large-scale AI processing.

Product Diversity and Scalability

Dell offers a wide range of server and storage options, from high-end to low-end, and has a product lineup to meet a variety of customer needs. This allows Dell to have a diverse customer base ranging from data centers to individual enterprises.

Provide secure solutions

The company is developing integrated AI and security solutions to help companies build secure AI models.This is an especially important competitive advantage in this day and age of data protection and privacy.

Strengthen supply chain and production capacity

With the growing demand for AI servers, Dell is increasing its production capacity and is strengthening its collaboration with NVIDIA, especially in the supply of GPUs.Respond quickly to market demand and meet customer expectations.

These strengths underpin Dell's AI server business and differentiate it from its competitors. In particular, the provision of high-performance hardware will be an important competitive advantage as data-intensive AI applications increase.

Super microcomputers (SMCI) are growing rapidly in AI servers, how do you differ from them?

There are several important differences between Dell and Super Micro Computer's (Super Micro) AI server business.
Super Micro has established a leading position in the AI server outsourcing market, and Dell is following in its footsteps.

Dell (DELL) Strengths

• Dell offers a wide range of IT infrastructure solutions and integrated services, and has a broad product portfolio for large enterprises and data centers.
• AI solutions focus on integration with security and incorporate advanced technologies such as generative AI.

Super Micro (SMCI) Strengths

• Super Micro offers particularly customizable and cost-effective products to the market, and its technological innovations have enabled it to achieve rapid growth in the AI server market.
• In providing high-performance AI servers, Super Micro leverages NVIDIA's latest AI semiconductors to deliver very high processing power to its servers, attracting significant demand from data centers and large enterprises.

Both companies have strengths in the AI server market, though,Dell is approaching the market with a holistic IT solutions and security integration approach.

This allows the two companies to each be competitive in a way that meets different market needs.

What is the PowerEdge XE9680? What are its strengths?

The PowerEdge XE9680 is Dell's high-performance AI server designed specifically for use in the fields of artificial intelligence (AI), machine learning (ML) and deep learning (DL).

The server is powered by next-generation Intel Xeon Scalable processors, which can use two processors with up to 56 cores of processing power.

In addition, it can be equipped with up to eight of the latest NVIDIA HGX H100 GPUs or AMD Instinct MI300X accelerators, thereby providing very high computing power.

Strengths of the PowerEdge XE9680

• Advanced GPU Density: The Up to eight NVIDIA HGX H100 80GB GPUs can be installed, allowing for advanced computational processing required for AI and ML model training.
• High capacity memory support: 1 It supports up to 4TB of DDR5 memory and can efficiently handle large data sets.
• Fast storage options:.Provides up to 122.88TB of NVMe/SAS/SATA SSD storage for fast data read/write.
• Enhanced security features:.Many features are built into the system's firmware to enhance data protection and system security, including signed encryption, secure data erasure, and secure boot.
• Advanced cooling system and power supply:.Equipped with a high-performance cooling fan and a 2800W redundant power supply to guarantee stable operation even under heavy loads.

The PowerEdge XE9680 is positioned as the ideal server solution for environments that demand AI and high-performance computing due to its high performance and flexibility.

As a result, large companies and research institutions use them to efficiently process data analysis, image processing, and complex computational tasks.

What is the outlook and future of the AI server market?

With the development of generative AI,The AI server market is growing rapidly and is expected to continue to do soThe company has been

The market size in 2023 was approximately $3.83 billion and is expected to reach approximately $17.74 billion by 2032, with a projected average annual growth rate of approximately 181 TP3T.

North America remains the leader in this market, with Silicon Valley in the U.S. in particular playing an important role in the development and adoption of AI servers.

Meanwhile, the Asia-Pacific region is also experiencing rapid growth, with demand for cloud services in particular driving growth in the region.

Key drivers of growth in the AI server market include increased adoption of AI and machine learning (ML), support from government regulations, advances in GPU technology, integration into AI autonomous systems, and increased large-scale data analysis, which will bring significant benefits to companies by optimizing decision making, improving process efficiency, and enhancing competitive Potential.

However, challenges also exist, including data privacy and security concerns, the complexity of AI algorithms, and skill shortages.
While these issues may limit market expansion, the latest trends such as edge AI computing, explainable AI (XAI), AI-as-a-Service (AIaaS), and diverse applications of generative AI provide new growth opportunities The following are some of the most important trends in the field of AI computing.

This market is increasingly competitive with companies such as Nvidia, IBM, Hewlett Packard, Dell, and Huawei, which are responding to market needs through technological innovation, strategic partnerships, and product offerings that reflect market trends.

Who are Dell's competitors in AI servers?

Dell's main competitors in the AI server business include.
Each of these companies competes in the AI server market with its own technology and product line.

• Super Microcomputer [SMC].: Known for its customizable server solutions, the company is a strong player in the AI server market. In particular, the company focuses on providing GPU-equipped servers to meet high-performance computing needs.
• Hewlett Packard Enterprise [HPE]:.It offers a wide range of enterprise technology solutions and has a presence in the market with servers dedicated to AI and big data analytics.
• NVIDIA [NVDA].:As a leader in GPU technology, the company provides hardware specialized for AI computation, and its technology is used in many AI server products.

Who is Dell's (DELL) AI server customer base?

Dell's AI server customer base is diverse and includes, among others, large data centers, cloud service providers, universities and research institutions, and large enterprises focused on innovation.

These customers use AI servers for applications that require high-performance computing resources, such as complex data processing, training machine learning models, or real-time data analysis.

• Data CentersData centers require high-performance servers for data processing and storage, and AI servers are designed to meet these demands.
• Cloud providers:.Companies offering cloud-based services require servers with advanced computing power to support the AI capabilities they offer their customers.
• Institutions and Institutes:.Universities and research institutions engaged in AI research and development use powerful servers to develop and test new AI models.
• Technology Leading Companies:.Companies in advanced technology industries such as self-driving cars, financial technology, and healthcare are using AI servers to develop and bring innovative solutions to market.

These customer segments are using AI technology to streamline operations, create new business models, and promote research, and Dell provides customizable and scalable AI server solutions to meet these needs.
The company helps customers build the optimal environment for their specific purposes.

What is Dell's focus on "AI PCs"?

Dell is in addition to the AI server,The company is also focusing on "AI PCs," personal computers with built-in AI functions.

An "AI PC" may also be referred to as an "AI PC" or an "AI-enabled PC.
In particular, the Latitude and Precision series laptops and desktops have brought AI capabilities to the forefront.

Latitude Series

The Latitude series offers portable, high-performance devices, most notably the Latitude 7350 Detachable and Latitude 9450 2-in-1. These are powered by Intel Core Ultra processors and support over 100 AI-optimized applications.
This enhances the use of AI in commercial applications, such as business collaboration tools and enhanced security.

Precision Series

Precision desktops are specifically designed as high-performance workstations for AI and VR. Examples include the Precision 7865 Tower and Precision 7960 Rack, which have high specifications to meet AI and VR requirements.
These models support up to 4TB of storage and 1TB of RAM and are powered by AMD Ryzen Threadripper PRO or Intel Xeon Platinum processors.

TheseAI-enabled PCs are particularly suited for tasks that require advanced computing power, such as data analysis, complex computational processing, and content creation, and are suitable for a wide range of customers, from business users to creative professionals.

What are the sectors, industries, and themes to which Dell (DELL) belongs?

sector

Information TechnologyDell Technologies is part of the Information Technology sector, which is home to companies that provide technologies and services that support the advancement of digitalization.

type of industry

Computer hardware and softwareDell is classified in the Computer Hardware industry and provides physical computer technology products such as desktops, laptops, and servers.
It also provides software and services, including data security solutions, cloud-based services, and IT infrastructure and support services.

Themes belonging to

Cloud Computing and AI Integration:.Dell's business strategy is strongly focused on integrating cloud computing and AI. The company leverages these technologies to provide solutions that optimize customers' IT operations and improve data center efficiency; AI technologies are incorporated in a variety of ways, including data analytics, network management, and security enhancements, to accelerate the digital transformation of the enterprise. The company is also a leader in the use of AI technology to improve the efficiency of data centers.

Dividends?

• Dell Technologies currently pays an annual dividend of $1.78, giving it a dividend yield of approximately 1.35%
• Dividends are paid quarterly.

Dell's (DELL) Financial Results

Dell Technologies' (DELL) financial year ends on January 31 of each year.
Its quarterly results are presented in the following schedule.

• First quarter results: Around the end of May
• Second quarter results: Around the end of August
• 3rd quarter financial results: around the end of November
• Q4 and full year results: around the end of February.

First, we will review the following four indicators to analyze Dell's (DELL) minimum performance.

1. Sales:An indicator of a company's performance and growth.
2. Operating cash flow and operating cash flow margin:An indicator that looks at how much cash a company generates from its services. Margins are considered excellent when they are 15% of that ratio.
3. Operating Income:Profit earned by a company from its core business. An indicator to evaluate a company's performance.
4. EPS:An indicator that looks at a company's earning power "profitability" and "growth potential" in terms of net income per share. The higher the number, the higher the profitability.

Each data is,Investing.com, ,TradingViewSee from

Dell Technologies (DELL) Stock Price

View the current real-time stock price chart (TradingView) for Dell Technologies (DELL).

The chart shows the Relative Strength Index (RSI). Reference as an indicator of market overheating.

*An overbought indicator when the RSI exceeds 70% to 80%, and conversely, an oversold indicator when the RSI falls below 20% to 30%.

Dell (DELL) Quarterly: Sales Trends

Quarterly sales forecasts and actual sales and year-on-year changes.

Sales forecasts and actual results are shown in graphs.

Dell (DELL) Quarterly: Operating Cash Flow Trends

Quarterly operating cash flow and operating cash flow margin.

Each transition is shown in the graph below.

Dell (DELL) Quarterly: Operating Income Trends

Quarterly operating income.

Each transition is shown in the graph below.

Dell (DELL) Quarterly: EPS Trends

Quarterly EPS forecast and actual EPS.

Each transition is shown in the graph below.

Dell (DELL) Full Year: Sales Trends

This is the sales forecast for the full year and actual sales and year-on-year changes.

Each transition is shown in the graph below.

Dell (DELL) Full Year: Operating Cash Flow Trends

Operating cash flow for the full year and operating cash flow margin.

Each transition is shown in the graph below.

Dell (DELL) Full Year: Operating Income Trends

Operating income for the full year.

Each transition is shown in the graph below.

Dell (DELL) Full Year: EPS Trends

This is the EPS forecast and actual EPS for the full year.

Each transition is shown in the graph below.

What is the future life of Dell Technologies (DELL)? What are the future developments?

 Future prospects for Dell Technologies are expected to grow, especially in the areas of AI and cloud computing.
The company is...The company is focusing on expanding its AI-optimized server product line, which is expected to accelerate the growth of its data storage business.

In addition, orders for AI servers are increasing, and the company is focusing on providing high-performance server solutions to meet customer needs.

Dell is also strengthening its activities in the areas of multi-cloud, edge computing, and promotion of open ecosystems. In particular, the practical application of edge AI is expected to advance the use of data in various industries such as manufacturing, retail, healthcare, and transportation.

This technology is expected to make it possible to process information in real time at the location where the data is generated for efficient operation.

These innovations are key to Dell's ability to achieve sustainable growth and remain competitive in the marketplace, while also developing strategies to seize new business opportunities through AI-driven products and solutions.
Dell will continue to strengthen its position at the forefront of technology.

Dell Technologies (DELL) Financial Summary for Full Year 2024

• Annual Revenue:At $8.84 billion, it decreased by $141 TP3T from the previous year.
• Operating Profit:520 million, a decrease of 101 TP3T from the previous year.
• Earnings per share:GAAP and non-GAAP were $4.36 and $7.13, respectively, down 61 TP3T from the prior year on a non-GAAP basis.
• Cash Flow:Cash flow from operating activities was $870 million, maintaining solid liquidity.
• Dividends:The annual cash dividend is increased by 20% to $1.78 per share.

Sales of servers for AI were strong, especially orders for AI-optimized servers, which increased by about 401 TP3T quarter-over-quarter, with the backlog reaching 290 million as of the end of the year.
This suggests that Dell is actively pursuing future business opportunities in AI technology.

Dell is also focused on expanding its portfolio of commercial AI laptops and mobile workstations to offer products that meet performance, cost, and security needs.

Overall, Dell is optimistic for FY2025 and confident in its strong cash flow generation capabilities and business sustainability.
Through its AI technology initiatives, Dell is expected to further strengthen its position in the industry.

Dell Technologies (DELL) Financial Summary for Q1 FY2025

• Net sales22.2 billion dollars, an increase of 61 TP3T over the same period last year.
• Net income 955 million, up 651 TP3T from $578 million in the same period last year.
• Earnings Per Share (EPS)
  • 1.32 on a GAAP basis, an increase of 671 TP3T over the same period last year.
  • 1.27 on a non-GAAP basis, a decrease of 31 TP3T from the same period last year.
• Operating income920 million on a GAAP basis, a decrease of 141 TP3T from the same period last year.
• Non-GAAP operating income1.474 billion dollars, a decrease of 81 TP3T from the same period last year.

Performance by Segment

Infrastructure Solutions Group (ISG)

• Net sales9.227 billion dollars, an increase of 221 TP3T over the same period last year.
• Server and Networking sales were $5.466 billion, up $421 TP3T from the same period last year.
• Storage sales were $3.761 billion, unchanged from the same period last year.
• Operating income was $736 million.

Client Solutions Group (CSG):.

• Net salesAt $11.967 billion, it was virtually unchanged from the same period last year.
• Commercial client sales were $10.154 billion, up 31 TP3T from the same period last year.
• Consumer sales were $1.813 billion, down 151 TP3T from the same period last year.
• Operating income was $732 million.

Other Highlights

• Cash and investments7.3 billion dollars at the end of the quarter.
• Cash Flow: Cash flow from operating activities
  • Cash flow from operating activities was $1.043 billion, down $41% from $1.777 billion in the same period last year.
  • Adjusted free cash flow was $623M, down 9% YoY.
• Shareholder Returns: (1)Returned $1.1 billion to shareholders through share repurchases and dividends.

Future Outlook

• Introduce new products and solutions to accelerate AI adoption and innovation.
• Provide infrastructure and services for AI workloads through Dell AI Factory.
• Expanded partnerships with Microsoft, NVIDIA, Meta, Hugging Face, and others to strengthen the open ecosystem.

Dell Technologies showed solid performance in the first quarter of FY2025, particularly in the Infrastructure Solutions Group (ISG).

While server and networking sales increased significantly and AI-related demand strengthened, there were also declines in consumer sales and operating income.
The company expects to continue to grow by introducing AI technology and expanding partnerships.

Dell Technologies (DELL) Financial Summary for Q2 FY2025

• Net sales: $25 billion, an increase of 91 TP3T over the same period last year.
• GAAP Net Income: $841 million, up 851 TP3T from $455 million in the same period last year.
• GAAP Earnings Per Share (EPS): $1.17, an increase of 861 TP3T from $0.63 in the same period last year.
• Non-GAAP Net Income: $1.371 billion, an increase of 71 TP3T over the same period last year.
• Non-GAAP Earnings Per Share: $1.89, up 91 TP3T from $1.74 in the same period last year.

Performance by Segment

• Infrastructure Solutions Group (ISG):
  • Sales were $11.6 billion, up $381 TP3T from the same period last year.
  • Server and Networking sales were $7.7 billion, up $80% from the same period last year.
  • Storage sales were $3.9 billion, down 51 TP3T from the same period last year.
• Client Solutions Group (CSG):
  • Sales were $12.4 billion, down 41 TP3T from the same period last year.
  • Sales to commercial customers totaled $10.56 billion, about the same as the previous year.
  • Consumer sales were $1.9 billion, down 221 TP3T from the same period last year.

Business Progress

• Demand for AI-related products: Demand for AI solutions accelerated in Q2, with demand for AI optimization servers increasing 231 TP3T to reach $580M in sales.
• shareholder return: Returned $1 billion to shareholders during the quarter in the form of stock repurchases and dividends. Cash and investments balance of $6 billion at quarter end.

Cash Flow

• Operating Cash Flow: $1.3 billion, down 581 TP3T from $3.214 billion in the same period last year.
• free cash flow: $704M, down $73% from $2.59B in the same period last year.

Future Outlook

• Sales Forecast: Dell expects continued growth in the third quarter and beyond, with demand for infrastructure and AI-related products expected to continue to support revenues.

Dell Technologies showed strong growth in both sales and profits in the second quarter as demand for AI-related products and servers increased. The company has also been active in returning profits to shareholders, raising expectations for future growth.

Which brokerage firm can I buy Dell (DELL) stock?

The following is a list of major brokerages that offer Dell Technologies (DELL) shares. At these brokerages, you can choose to invest as a CFD (Contract for Difference) as well as directly as a foreign stock.

I myself mainly use SBI Securities, but some stocks they handle may not be available for purchase. In such cases, I sometimes use CFDs at Saxo Bank Securities or IG Securities.

summary

Dell Technologies (DELL) aims to grow its competitive advantage and performance in the market, especially in the AI server business.

As AI technology advances, demand for high-performance semiconductors and AI servers has skyrocketed, making these technologies essential for many companies.

In the market,super microcomputeris the leader in external sales of AI servers and is experiencing remarkable growth, Dell has a unique advantage in providing total service.

The growth potential of the AI server market is very high, and there are high expectations for Dell's future performance.