3 hrs ago
Dell Shares Rise as Axelera AI Chip Enters Future Servers
Dell makes computers and servers that help companies use artificial intelligence.
Its stock price rose after Axelera AI announced a new chip called Europa.
The chip is designed to help AI systems answer questions and perform tasks.
Europa may be included in some future Dell servers.
It may also be used in future systems from Supermicro.
Axelera says more than 600 customers already use its technology.
It estimates that possible future sales could reach $1.5 billion, but that is not money it has already earned.
Dell’s AI-server business is still much bigger, and NVIDIA-based systems currently provide most of its near-term AI business.
Dell shares climbed about 5.8% to $565.15 after Axelera AI unveiled its Europa inference processor.
Europa is expected to appear in future Dell systems and may also be used by Supermicro.
Axelera AI said more than 600 customers use its technology, with signed agreements worth tens of millions of dollars.
The company cited a potential sales pipeline of up to $1.5 billion, though that figure is not booked revenue.
Dell’s AI-server business remains much larger, with about $95 billion in backlog and $16.4 billion in recent shipments.
- Who
- Dell Technologies and European AI-chip startup Axelera AI, with Supermicro also mentioned.
- What
- Dell shares rose after Axelera AI unveiled its Europa inference processor, which is expected to feature in future Dell systems.
- Where
- When
- Tuesday; the article also refers to Dell’s latest quarter.
- Why
- Investors remain optimistic about Dell’s AI-server business, and Europa gives Dell another potential inference-chip supplier and hardware option.
Growth optimism
Scale and revenue caution
Impact of Europa
Growth optimism
Europa gives Dell another inference supplier and could provide more power-efficient hardware choices for future AI servers.
Scale and revenue caution
Even the full cited $1.5 billion opportunity would equal only about 1.6% of Dell’s existing AI-server backlog.
Axelera’s business opportunity
Growth optimism
Axelera AI reports more than 600 customers, signed agreements worth tens of millions of dollars, and a broader potential pipeline of up to $1.5 billion.
Scale and revenue caution
The $1.5 billion figure represents a potential sales opportunity rather than booked revenue, so it does not indicate current sales.
Dell’s AI outlook
Growth optimism
Investors remain bullish on Dell’s AI-server business, contributing to the share-price increase.
Scale and revenue caution
NVIDIA-based systems continue to represent a much larger share of Dell’s near-term AI economics.
Key facts
- Dell share move
- Shares rose about 5.8% to $565.15.
- New processor
- Axelera AI unveiled the Europa inference processor.
- Customer base
- Axelera AI said more than 600 customers use its technology.
- Potential pipeline
- Axelera cited a potential sales opportunity of up to $1.5 billion; this is not booked revenue.
- Dell AI-server backlog
- Dell ended its latest quarter with roughly $95 billion in AI-server backlog.
- Recent AI-system shipments
- Dell shipped $16.4 billion of AI systems in its latest quarter.
- Competitive position
- NVIDIA-based systems account for a much larger share of Dell’s near-term AI economics.
Sources
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