Investing.com — artificial intelligence server maker Super Micro Computer Inc (NASDAQ plunged 33% on Wednesday and is down another 12% today after the company disclosed that its registered public accountant Ernst & Young LLP resigned amid a fiscal audit of the company's results for the year. Amid the chaos at SMCI, analysts say another ai server maker will benefit: Dell Technologies Inc (NYSE:) (NASDAQ: DELL).
Dell rose 6% on Wednesday, but Mizuho desktop analyst Jordan Klein believes there is more upside and is now bullish on the stock.
“If you're not paying attention to the mess that is SMCI, you should be,” Klien said. As a result, the analyst sees significant upside for Dell over the next two to three quarters and would remain a buyer on any weakness.
“My view is that any customer who does not want to take the risk of missing a deadline or financial target due to SMCI-related issues will move their ai server business to another vendor, such as DELL,” the analyst added.
Klein also warns that SMCI's supplier, NVIDIA Corporation (NASDAQ: GPU and liquid cooling products to build multi-million dollar Blackwell NVL72 rack systems.
“NVDA will likely start moving most of its GPU supply away from SMCI until they clarify the situation,” the analyst says. He said this benefits Dell.
With SMCI potentially crippled, this “eliminates a pricing aggressor in Gen ai server pricing systems,” according to the analyst.
“Dell walked away from large Tier 1 cloud supply deals because of weak margins (they preferred not to lose money on revenue),” the analyst said. “They are focused on profitable Tier 2 cloud customers. But maybe they can come back and WIN TIER 1 CLOUD SERVER BIDS WITH MORE GPU SUPPLY AND LESS PRICING PRESSURE FROM SMCI.”
Dell shares fell 3% in early trading Thursday.
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