Jul. 31 at 1:59 AM
$SMCI vs.
$DELL — Why I’m more bullish on SMCI
Both are respected companies in AI infrastructure, but I believe SMCI offers the better upside at today’s valuation.
• Higher AI exposure: SMCI is much more directly tied to AI server deployments, while Dell’s business is spread across PCs, storage, networking, and services.
• Faster innovation: SMCI’s building-block architecture allows it to bring new NVIDIA, AMD, and Intel platforms to market quickly, which has been a competitive advantage in a rapidly evolving AI cycle.
• Hyperscaler momentum: The company has highlighted record order activity and a massive AI backlog, indicating continued demand from large-scale customers.
• Operating leverage: As product mix improves and manufacturing capacity scales, stronger margins can have an outsized impact on earnings growth.
• Valuation: Much of the market’s skepticism appears to already be reflected in SMCI’s share price. If the company continues executing and delivers on its guidance, there is greater potential for multiple expansion than a mature company like Dell.
Dell is a solid company, but it’s a diversified technology business. SMCI is a more concentrated AI infrastructure play, and if AI data center spending remains strong over the next several years, that concentration could translate into greater upside, along with higher risk.
That’s why I own SMCI.
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