Tesla AI efforts could boost Dell's business: Evercore ISI

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Investment research firm Evercore ISI raised its price target for Dell stock from $140 to $165 per share. Analysts at the company noted that Dell may have secured a significant portion of Tesla's future AI server expansion, and the deal could be worth billions of dollars.

Analysts at Evercore noted that the potential partnership with Tesla could further increase Dell's AI backlog, currently estimated at about $2.9 billion. With this in mind, Tesla's ambitious plans to significantly increase its computing power with a focus on developing and improving Full Self-Driving (FSD) means that for Dell he will be able to move from $2.5 billion to his It could lead to $3 billion in revenue.

“Tesla has indicated that it plans to grow up to 85,000 units of computing power (H100 or equivalent) by the end of the year, up from ~35,000 units of compute power (H100 or equivalent) deployed today. According to our analysis, this This could potentially create a revenue/order opportunity of approximately $2.5-3 billion in CY24 for Dell,” Evercore ISI analysts noted.

Competitor Super Microcomputer (SMCI) may also be securing a piece of Tesla's pie, but Evercore ISI notes that Dell is likely to receive even more orders from the electric car maker. did. Dell's victory may extend beyond servers, as Dell is also expected to supply significant amounts of storage hardware.

“Importantly, in addition to the AI ​​servers that Dell can ship in line with AI server shipments, we are also acquiring a significant amount of storage connectivity (storage typically lags x86 server deployment by two to three quarters). ),” Evercore analysts noted.

The company also noted that Dell is aggressively positioning itself to capture market share in the Tier 2 cloud service provider, sovereign, and enterprise markets for AI infrastructure. Investing.com report. “Dell continues to gain attention for AI servers and, more importantly, AI attach. I will support you in lifting it up.”

Dell has not commented on potential business with Tesla. As stated in a report from streeta Dell spokesperson said only, “We are in a quiet period and plan to share updated financial information, including our server business, at our first quarter earnings call on May 30th.''

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