Dell Technologies (NYSE:DELL) and Supermicro Computer (NASDAQ:SMCI) have partnered with Elon Musk‘s artificial intelligence startup, xAI. The companies will provide server racks to power xAI’s supercomputer, Gigafactory of Compute, which is expected to start running by late 2025. Musk aims to use this supercomputer to boost the capabilities of his generative AI chatbot, Grok.
In another development, Dell disclosed its plans to set up an AI factory in collaboration with Nvidia (NVDA). DELL aims to leverage NVDA’s chips to help xAI train and run its advanced AI models.
Importantly, Musk revealed last year that about 20,000 Nvidia H100 graphic processing units (GPUs) were used to train the Grok 2 model. Additionally, he mentioned that over 100,000 chips would be required to train the Grok 3 model. So, by teaming up with tech giants like Dell and SMCI, xAI gains access to the servers required to train its AI models.
Which AI Stock Is Best to Buy?
While all AI stocks are expected to benefit from the boom in AI demand, let’s take a look at what Wall Street analysts think about each of the above-mentioned AI stocks: NVDA, DELL, and SMCI.
Among the three stocks, both Dell and Nvidia have a Strong Buy consensus rating, while SMCI stock has a Moderate Buy rating. Regarding future price performance, analysts expect an upside potential of 5.36% and 15.9% in Dell and SMCI, respectively, while NVDA stock is expected to see a potential decline of 2.65%.
Among these stocks, DELL is the only one with a “Perfect 10” Smart Score, which indicates its potential to beat market averages.
