By As AI investments continue to be a hot topic on Wall Street, the business they bring to AI server makers cannot be ignored.
DELL and Hewlett Packard Enterprise are two strong players in this market segment, and both offer good exposure to the upside offered by AI through their server businesses.
Both companies have leveraged their hardware expertise to be well-placed to benefit from the ongoing AI boom.
Let’s look at which company is more suited to win in the AI server market.
Super Micro Computers dominates the market
The market share in the AI servers segment is dominated by Super Micro Computers (SMCI).
However, the company is under fire because of accounting irregularities.
According to the company, it owns 70% of the Direct Liquid Cooling(DLC).
DLC is a relatively new niche and even though SMCI has been able to get a good market share to begin with, the bigger players will soon join the party.
They can afford to be late if they have better overall technology and better relationships and contracts.
Once that happens, both DELL and HPE stand to gain from further investments in servers.
HPE is already hosting an AI event next month, focusing on DLC. They’re just getting started on their plans to dominate this niche.
DELL being the biggest player is sitting back for now, but it too should soon start taking its piece of the pie.
Nvidia’s CEO recently pointed out that servers using Blackwell GPUs will need Direct Liquid Cooling.
DELL already has a good relationship with Nvidia for its Blackwell GPUs and it may be the bigger beneficiary of the three companies once the new line of GPUs hits the market.
HPE excels in high-performance computing segment
HPE has a clear advantage in the high-performance computing segment.
Its acquisition of Cray systems made it a leader in high-performance AI infrastructure.
For enterprise workloads, HPE therefore takes a big piece of market share by targeting areas like scientific research and climate modelling among others.
DELL on the other hand focuses more on providing scalable AI solutions for mid-market customers.
In other words, DELL targets customers who want to access powerful AI computing capabilities, but do not necessarily require supercomputing-level infrastructure.
Even though HPE is the clear winner for this segment, the fact that they cater to slightly different customer types means they don’t eat into each other’s revenues.
Software and cloud integration
This is where things get interesting. HPE has traditionally been focused on integrating AI infrastructure with software.
This is beneficial in hybrid and multi-cloud environments.
DELL on the other hand is hardware-centric. It offers a good suite of products for high-performance AI servers that contain powerful GPUs.
However, the lack of software means customers using hybrid AI environments do not prefer the company’s superior hardware.
HPE therefore leads in software and cloud integration.
Despite HPE having a clear advantage in the server space, both companies are a good bet on AI server demand.
If you think more comprehensive AI solutions will be in demand in future, HPE should be your choice.
It won’t be a bad idea to have both the stocks in your portfolio though, as you’ll have exposure to a broad range of AI server market services through these two companies.
The post DELL vs. HPE: Which offers better investment in AI servers? appeared first on Invezz
