The AI boom has made Michael Dell look very clever indeed. The US tech mogul took his eponymous laptop-maker private in 2013 at a valuation of $25bn. Some 13 years later, his 40 per cent stake is worth about $120bn. Dell’s shares have surged 46 per cent since Thursday, when it reported earnings and said that its servers, used in AI data centres, are in high demand.
A decade ago, Dell was in a very different place. Foreign competition had turned its main PC business into a race to the bottom. A pivot to “enterprise” products, while logical, promised to be a slog. But the lavish spending of hyperscalers such as Google, OpenAI and SpaceX has delivered a windfall. First-quarter revenue from AI infrastructure was up a remarkable 757 per cent, year-over-year, to $16bn.
But the halo around Silicon Valley’s capital spending frenzy is spreading. Dell’s revenue from selling run-of-the-mill servers nearly doubled in the quarter. And even the segment that includes its PC business was up nearly a fifth in the quarter. Its top line hovered at about $100bn for years; analysts now expect it to double as soon as 2028, according to LSEG.