Dell, Super Micro stocks rise after Musk says companies will supply hardware for xAI
Shares of Dell (DELL) and Super Micro Computer (SMCI) popped Thursday after xAI founder Elon Musk said the companies are providing hardware for the supercomputer his AI startup is building.
The moves higher underscore Wall Street's excitement around AI technology.
Investors are clamoring to buy into AI businesses at every level of development, from major consumer-facing brands selling AI-powered apps to manufacturers providing the chips and servers powering the computing infrastructure.
Shares of Dell rose as high as 5% Thursday morning, while Super Micro's stock climbed nearly 9%.
Dell's CEO Michael Dell set up the jump for his company's share price when he said in a post on X Wednesday, “We’re building a Dell AI factory with Nvidia to power Grok for xAI."
Musk, who owns X, clarified a few hours later that Dell would be assembling half the racks that are going into the supercomputer. In response to comments asking who would be building the remaining half, Musk replied "SMC."
The AI announcement took place over the Juneteenth holiday when markets were closed. But investors poured into the stocks the following session.
Both Dell and Super Micro are working to capitalize on the immense growth surrounding AI technologies. Earlier this week, Super Micro announced plans to expand facilities in Silicon Valley to bolster its AI business. And Dell reported last month that revenue from its AI servers more than doubled from the prior quarter.
Musk is also trying to position his startup as a leader in AI, even as tech giants Microsoft (MSFT) and Alphabet (GOOG, GOOGL), which owns Google, have made major inroads. His AI enterprise raised $6 billion in series B funding, backers announced last month, reaching a valuation of $24 billion as investors bet on the dominant tech platforms as well as upstart challengers in a rapidly escalating AI race.
Other big names are getting in on the AI game too. Apple (AAPL), whose leaders were reluctant to share their AI strategy prematurely, unveiled the company's strategic vision earlier this month. They debuted the Apple Intelligence platform at the annual Worldwide Developers Conference, marking a major shift for the company, which will soon introduce a host of new AI-infused features to its operating systems and products.
Even as the tech giants have enjoyed substantial share price gains riding the momentum of AI development, Nvidia (NVDA), the chipmaker that has become an icon of the AI rally, has outshined them all.
On Thursday, Nvidia widened its lead as the world's most valuable company after moving ahead of Microsoft earlier this week. Shares climbed more than 2%, benefiting from the Dell and Super Micro announcements. Its market cap stood at $3.42 trillion.
Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on Twitter @hshaban.
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