Here’s How Mizuho Analysts See the AI Opportunity for Two Tech Stocks

Dell Technologies (DELL) and Super Micro Computer (SMCI), or Supermicro, stand to benefit from soaring demand for generative artificial intelligence (AI) servers, according to Mizuho analysts.

The firm’s analysts started coverage of both companies, giving Dell an Outperform rating and a price target of $135 while listing Supermicro as Neutral with a price target of $450. Both targets were below the Wall Street mean as calculated by Visible Alpha.

Dell’s shares rose in recent trading, while Super Micro’s edged lower.

In a note to clients, Mizuho said that generative AI “is igniting growth and disruption across multiple markets, pushing the frontiers of innovation and productivity.” AI servers make up the infrastructure enabling the AI revolution, the note said, and that they see Dell and Supermicro as the “two major server OEMs spearheading this future.”

The analysts added that generative AI will expand exponentially, “supporting secular growth in the AI server market.” However, they note that companies in the sector face profitability risks from “low differentiation, a concentrated customer base, and increasing competition.”

Both companies’ shares are up more than 50% this year so far.