Data Center
Dell Q1 Pre-Earnings: It’s All About the QoQ AI Revenue Growth
Dell will report its Q1 earnings tomorrow at market close. The market will want to see strong QoQ AI revenue growth. Last quarter, the growth was 40% sequentially in Q4 to $800 million in AI optimized server revenue with a $2.9B backlog. The backlog grew 81% QoQ from $1.6B. Super Micro is hitting capacity, and building quickly to increase that capacity. In the meantime, it appears Dell is stepping in to fill AI server demand as a runner-up to SMCI. It is not terribly difficult to imagine Dell as #2 for AI servers as it’s been #1 globally across all servers for some time. It’s estimated that SMCI will have about $25 billion in production capacity. Current estimates are for an AI server market of $40 billion by end of 2024. Whether it’s the near-term TAM or if we simply look at Nvidia’s beat/raises, the conclusion is that more than just Super Micro will be needed to build AI servers.
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