Dell and Samsung grab first-class tickets for AI hype train

Dell and Samsung are the latest beneficiaries of the current frenzy of speculation surrounding anything AI related, with both vendors seeing a rise in share prices related to their future AI prospects.

Shares in Dell were said to be up 8 percent in extended trading following the Round Rock company releasing its results for the second quarter of its financial year 2024. These showed that revenue was $22.9 billion, down 13 percent on the same period last year.

However, this figure was also up 10 percent on the previous quarter, with the company attributing this growth to rising demand for AI-optimized servers, as well as its PowerStore and PowerFlex storage systems. AI accounted for 20 percent of server revenue in the first half of the year, Dell said.

Similarly, Dell said it is seeing growth in demand for its workstations designed to help organizations run complex AI workloads locally, with its commercial client revenue hitting $10.6 billion. This accounted for the lion’s share of the Client Solutions Group second quarter revenue of $12.9 billion, which was down 16 percent year-on-year but up 8 percent on the last quarter.

Dell vice chairman and chief operating officer Jeff Clarke said that the company continued to focus on the most profitable segments of the market where he claimed Dell has a leading position.

“Artificial intelligence is a strong tailwind for all things data and compute,” he said, adding that AI is “expanding the TAM (total addressable market) for technology spending and is projected to grow at 19 percent for the next couple of years to approximately $90 billion, including hardware and services.”

The company recently announced a portfolio of products and services tailored for generative AI, including validated designs for inference systems jointly engineered with Nvidia and professional services to help customers adopt the technology.

Dell said it is raising its full year revenue expectations to be in the range of $89.5 billion to $91.5 billion, and hinted that it expected to see growth in Q4, fueled by AI demand.

Samsung also saw its share price rise more than 6 percent on speculation that it will be supplying advanced memory chips to Nvidia and on its announcement of high capacity 32-gigabit DDR5 DRAM chips.

Reports claimed that Samsung will join rivals SK hynix and TSMC in supplying new HBM3 chips to Nvidia for its high-end GPUs used for AI processing.

The new 32Gb memory chips pave the way to DRAM modules of up to 1TB in capacity, Samsung said, targeting customers that require applications like AI as well as datacenters and next-generation computing.

Mass production of the 32Gb DDR5 DRAM is scheduled to begin by the end of this year, according to Samsung. ®


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