Dell’s AI Server Demand Surges & Chevron’s Venezuela Expansion

**SPEAKER_1** (0:00)
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**Hanna Horvath** (0:31)
Would you pay Dyson $500 to put a camera in your mouth?

**Dylan Lewis** (0:34)
And dude, you're getting a server from Dell.

**Hanna Horvath** (0:37)
For Wednesday, September 2nd, it's Brew Markets Daily. I'm Hanna Horvath.

**Dylan Lewis** (0:40)
And I'm Dylan Lewis. Let's get into it.
All right, we're kicking off today's show with earnings out from Dell. I had one of their laptops in my college dorm room, but their computers aren't really what's driving the business. These days, the stock is up 11% after the company reported earnings that the market absolutely loved. Revenue hitting nearly 47 billion, up 58% year over year. Net income almost tripling to 4.1 billion. The results were incredible. And as you may have guessed, fueled by AI.
If you're trying to understand where Dell fits into the AI ecosystem, the bulk of Dell's revenue comes from its servers business. To oversimplify it just a little bit, Dell buys chips from companies like Nvidia, then builds them into servers and sells those servers to customers who need data center hardware. This has been an absolutely booming business for Dell. Its infrastructure solutions group is nearly two thirds of the company's overall revenue, grew 89% year over year. And the AI optimized servers are about half of that overall segment.
And the good times are expected to continue for the segment and for Dell, Hanna. They guided for 200% year over year growth for its AI servers. That is double the company's original forecasts.

**Hanna Horvath** (1:55)
Yeah, I think the next question here is, why is Dell winning so much of the business and can anybody keep up? The advantage that Dell really has is that it already has the supply chain, the manufacturing capacity, and the relationships with those huge companies that need to deploy thousands of those servers at once. And right now, that matters a lot. AI infrastructure is incredibly complicated and supply is tight. So if you're a giant company that is spending billions of dollars building out AI capacity, you probably don't want to piece all of it together yourself. Maybe you want someone who can get you the chips, who can package them into servers, who can connect it all together and deliver it at scale. That is a very good place for Dell to be right now. And you can really see it in the backlog. Dell now has $95 billion worth of AI server orders waiting to be filled. And customers are placing orders well in advance because they are worried about securing supply.
So, Dylan, does this increasingly become a scale game? You know, there are obviously competitors here, HPE and Supermicro, for example. But if demand stays this intense, does simply being one of the companies that could reliably deliver huge amounts of infrastructure become its own competitive advantage?

**Dylan Lewis** (3:01)
It definitely does. But I think Dell really separated itself from some of those other companies in some key ways. I mean, for businesses that are enterprise, but not quite at the hyperscaler level, Dell is one of the top suppliers, and that has been an absolutely huge market for them. That gives them some of the scale you were talking about. HPE's business tends to skew a little bit more towards sovereign customers and research facilities.
Also, relationships came up earlier. Michael Dell and Jensen Huang seem to have a very good relationship. They were on stage together in May at a Dell's event in Las Vegas.
They have been launch partners for several NVIDIA products, and that probably helps when it comes to chip supply, getting the allocations they need, because we are in this supply-constrained environment. All of that has helped them put up fantastic business results. Dell is up 240% year-to-date. That is up 10x since 2023 as well. We are going to talk about Chevron's long game in Venezuela. But first, this episode is brought to you by Charles Schwab.

**Hanna Horvath** (3:55)
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