Super Micro Computer or Dell: Mizuho Selects the One Must-Buy AI Stock

Over the past few years, it’s become clear that the technology sector has been a key driver of market growth. Innovations, especially in generative AI, are rapidly enhancing software capabilities, offering the potential for greater productivity and adaptability in digital tools.

Yet, while software plays a vital role, none of this progress could happen without the hardware driving it. This underscores compelling investment opportunities in tech companies that provide the server hardware necessary for running AI applications.

In this context, Vijay Rakesh, a 5-star analyst at Mizuho, has shifted his focus to the AI space, specifically focusing on server hardware.

“Generative AI is igniting growth and disruption across multiple markets, pushing the frontiers of innovation and productivity. AI servers comprise the infrastructure enabling the AI revolution,” Rakesh opined. “The AI server market is projected to be a ~$406B market by 2027E, growing at a ~54% CAGR driven by CSPs (Hyperscale and Tier 2) and Enterprise demand. We see GenAI growing exponentially, supporting secular growth in the AI server market.”

Not all AI stocks are created equal, however, and some present better investment prospects than others. Rakesh highlights two key players in this space, Super Micro Computer (NASDAQ:SMCI) and Dell Technologies (NYSE:DELL), and offers insight into which stands out as a must-buy AI stock. Let’s dive into both, using the latest data from TipRanks alongside insights from Mizuho’s report.

Super Micro Computer

We’ll start with a look at Super Micro Computer, a high-tech firm from Silicon Valley that specializes in developing and producing the hardware behind high-performance computing and high-end server stacks. In addition, Super Micro provides management software and memory storage systems for a wide range of enterprise-scale applications, including AI, cloud computing, data centers, edge computing, and 5G networking.

This company has been in business for more than thirty years and has established itself as a go-to for high-end computing needs. Super Micro has in-house expertise to handle the design and building of complex server stacks and high-performance computers and can install these systems at all scales. The company has product lines available for custom builds, to meet customers’ idiosyncratic needs, or off-the-shelf, and can even handle unique or unusual design requests. Super Micro supports its product offerings with a large-scale manufacturing footprint, capable of producing some 5,000 AI, HPC, and liquid cooling rack solutions every month.