The AI boom gives 1990s IT brands a second crack at youth

{"text":[[{"start":4.75,"text":"The AI boom has made Michael Dell look very clever indeed. The US tech mogul took his eponymous laptop-maker private in 2013 at a valuation of $25bn. Some 13 years later, his 40 per cent stake is worth about $120bn. Dell’s shares have surged 46 per cent since Thursday, when it reported earnings and said that its servers, used in AI data centres, are in high demand."}],[{"start":30.9,"text":"A decade ago, Dell was in a very different place. Foreign competition had turned its main PC business into a race to the bottom. A pivot to “enterprise” products, while logical, promised to be a slog. But the lavish spending of hyperscalers such as Google, OpenAI and SpaceX has delivered a windfall. First-quarter revenue from AI infrastructure was up a remarkable 757 per cent, year over year, to $16bn."}],[{"start":59.3,"text":"But the halo around Silicon Valley’s capital spending frenzy is spreading. Dell’s revenue from selling run-of-the-mill servers nearly doubled in the quarter. And even the segment that includes its PC business was up nearly a fifth in the quarter. Its top line hovered at about $100bn for years; analysts now expect it to double as soon as 2028, according to LSEG."}],[{"start":82.1,"text":"Nor is it the only one whose glide towards irrelevance has been roundly disrupted by AI. Hewlett Packard Enterprise, another 1990s tech throwback that was once part of Hewlett-Packard, reported blowout results from its server division on Monday, driving its shares up by more than a quarter the following day. What was previously a steady, unglamorous IT group that helped enterprises manage all aspects of their “tech stacks” is behaving like a growth stock."}],[{"start":null,"text":"

"}],[{"start":109.89999999999999,"text":"The catch is that companies such as Dell and HPE are just one link in a much larger AI-related domino rally. Server manufacturers rely on parts that are in turn witnessing price rises and supply-chain constraints — Dell called out the elevated prices of DRam and Nand memory components. Despite historically high revenue in the first quarter, its gross margin fell to 18 per cent, the lowest since it relisted in 2018."}],[{"start":136.2,"text":"For now, however, top-line growth is what excites Wall Street. Dell’s enterprise value is now just under $300bn. Its stock trades at 25 times its — rapidly growing — forecast earnings per share. That may not be what a hotshot start-up can command, but it’s definitely better than the typical plodding tech vendor previously had any reason to expect."}],[{"start":165.29999999999998,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1780472716_7832.mp3"}