Mizuho Securities boosts its Dell price target by 19% to $215, projecting the company will capture 25% of the AI server market by 2029.
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Dell target lifted to $215 on forecast of 25% AI server share
(P1) Dell Technologies is positioned to capture a larger piece of a rapidly expanding artificial-intelligence server market, according to Mizuho Securities, which lifted its price target on the stock to $215 from $180. (P2) "All key customers indicate continued willingness to stand up additional AI server clusters," Mizuho analyst Vijay Rakesh said, highlighting the demand from both smaller cloud providers and enterprise data centers. (P3) The firm reiterated its Outperform rating on Dell, forecasting its AI server orders will hit $68 billion in fiscal 2028. In contrast, Mizuho maintained a Neutral rating on competitor Super Micro Computer and cut its price target to $25 from $33. (P4) The diverging outlooks suggest a potential market share shift is underway, as Super Micro grapples with legal controversies that could divert near-term orders to Dell, which Mizuho sees as the primary beneficiary of a market expected to reach $862 billion by 2029.
Dell's Path to 25% Market Share
Rising capital expenditure from the world's largest technology companies is creating a massive tailwind for AI server manufacturers. Mizuho projects total AI server spending will grow from approximately $140 billion in 2024 to $862 billion by 2029. Within this expanding market, Dell is set to thrive. Rakesh projects Dell’s market share will grow from 19% in 2025 to 25% by 2029. This growth is expected to come at the expense of Super Micro and Taiwanese manufacturers like Foxconn Technology and Quanta Computer. The firm's report cited Dell’s "enormous sales and support staff, developed supply chain, and strong balance sheet" as key advantages that position it to win enterprise and sovereign data center deals. Mizuho raised its estimates for Dell’s AI server orders to $53 billion for fiscal 2027 and $68 billion for fiscal 2028.
Super Micro's Legal Headwinds
While Super Micro remains a technology leader in the AI server space, its stock has faced pressure, falling 21% this year. The decline follows federal indictments against a co-founder and two others for allegedly violating export-control laws by diverting servers to China. Super Micro itself was not charged, but the legal issues create uncertainty. Rakesh noted the indictments could cause a near-term shift in orders toward Dell. Dell stock has climbed 39% this year, trading at $174.40 on Monday. The new $215 price target from Mizuho implies a further 23% upside from current levels, reflecting the conviction that Dell will absorb a significant portion of the industry's explosive growth.
This article is for informational purposes only and does not constitute investment advice.
