Breaking up is never fun. And in the case of Super microcomputer (NASDAQ: SMCI)there’s a pretty obvious reason why it’s an old partner Nvidia seems to go further.
In late August, Supermicro came into the spotlight as the target of a brief report written by Hindenburg Research. Shortly thereafter, Supermicro previously deferred its 10-K filing The Wall Street Journal reported that the Justice Department had launched an investigation into the company. To make matters worse, Ernst & Young resigned as Supermicro’s financial auditor over concerns about the company’s reporting. Amid these falling dominoes, the company was expected to become a major supplier of new storage clusters and server rack designs featuring Nvidia’s soon-to-be-launched Blackwell GPU.
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Apparently Nvidia has had enough. According to an article from Digitimes, Nvidia is steering Blackwell orders away from Supermicro to avoid possible supply chain disruptions.
In this context Dell Technologies (NYSE: DELL) could emerge victorious from the consequences of Supermicro. This is why the stock represents a great opportunity.
Nvidia has a lot at stake with the Blackwell launch, and any bump at this stage of the game is unacceptable. But why should Dell help in this situation?
Dell is known for its consumer and enterprise computing equipment, but it also has a large infrastructure solutions business, which is a fancy way of saying that Dell provides networking services and products for data centers. Like Supermicro, Dell’s storage solutions and server designs are an integral part of the broader artificial intelligence (AI) industry. The reason for this is that data centers contain chipsets such as Nvidia’s GPUs, which are a key device for developing generative AI applications.
Perhaps the biggest reason Dell could be the winner of the Blackwell launch is due to some clues management dropped during the company’s latest earnings call. In August, Chief Operating Officer Jeffrey Clarke said the company has sold its “most advanced architecture aligned with Blackwell to a number of customers.”
He followed this up by telling investors that the backlog of Dell’s IT infrastructure “is in all kinds of architectures,” but “[t]he vast majority [is] within Nvidia H100s, H200s and Blackwell, as well as a number of other options nearby AMD And Intel.”
