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Dell Technologies (NYSE: DELL) has been in sizzling form on the stock market so far in 2024, rising an impressive 76% as of this writing. This occurred thanks to a turnaround in the company’s fortunes due to the growing demand for its server solutions used for mounting artificial intelligence (AI) chips.

The stock’s 2024 rally will be put to the test when Dell releases its fiscal 2025 third-quarter results on Tuesday, Nov. 26. Let’s see what investors can expect from Dell when it releases its quarterly report, and check if its guidance is going to be solid enough to help it sustain its impressive rally.

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When Dell released its fiscal 2025 second-quarter results in August, management pointed out that the company’s growth is likely to pick up in the second half of the fiscal year. It guided for fiscal Q3 revenue of $24.5 billion at the midpoint of its guidance range, which would be a 10% jump from the same quarter last year.

Dell expects adjusted earnings to land at $2 per share at the midpoint. Consensus estimates compiled by Yahoo! Finance, however, are expecting Dell to deliver $2.04 per share in earnings on revenue of $24.7 billion. It won’t be surprising to see the company beat Wall Street’s increased expectations, thanks to the solid demand for its AI servers.

For instance, in fiscal Q2, Dell sold $3.2 billion worth of AI servers, as compared to $2.6 billion in Q1. A strong performance seems to be in the cards, once again, as the company finished Q2 with an AI server order backlog of $3.8 billion.

It also pointed out that it has a potential revenue pipeline that “has grown to several multiples of our backlog.” If Dell manages to ship more AI servers on the back of an improved supply chain, there’s a good chance it can post better-than-expected numbers.

Another factor that could play in Dell’s favor involves the problems that its rival Super Micro Computer (NASDAQ: SMCI) is facing. Supermicro stock has plummeted on negative news, including accusations of accounting manipulation, the resignation of its auditor, and management’s failure to file the annual report within the stipulated timeline.

It now appears that Supermicro’s customers are shifting their orders away from the company. As reported by Tom’s Hardware, Elon Musk’s xAI has reportedly taken $6 billion worth of AI server orders elsewhere from Supermicro. The report adds that Dell could be one of the biggest beneficiaries of such a development as it’s one of the largest server manufacturers in the world.

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Moreover, Dell reportedly commands half of the AI server orders from Elon Musk-led companies (with Supermicro controlling the other half). If Supermicro is indeed losing orders for AI servers, the chances of Dell delivering better-than-expected results and guidance are stronger.

With the stage set for Dell to deliver better-than-expected results, investors should also note that a negative reaction to the company’s results should be treated as a buying opportunity. That’s because the global AI server market is forecast to hit $177 billion in annual revenue by 2032, according to Global Market Insights, up from $38 billion last year.

This explains why Dell management remarked on the last earnings conference call that it has a solid pipeline of customers for its AI servers that’s significantly larger than its backlog. If Dell can convert that pipeline into actual revenue and win a bigger share of the AI server market, it could see a long-term acceleration in its revenue and earnings growth.

It’s worth noting that Dell’s earnings in fiscal 2024 fell 6% from the previous year to $7.13 per share. The company expects to deliver $7.80 per share in earnings in fiscal 2025, which would be an improvement of 9% from the previous year at the midpoint. The forecast for the next couple of years points toward a stronger jump in Dell’s bottom line.

With Dell currently trading at 25 times trailing earnings and 13 times forward earnings, investors are getting a good deal on this AI stock right now. They may want to grab it with both hands, as it looks likely to take off after releasing its results on Nov. 26.

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Unprofitable Chinese electric vehicle (EV) makers, ravaged by a discount war at home and higher tariffs abroad, are stepping up cost-cutting measures and new model launches as they strive to survive in the cutthroat market.

Only those that can sustain their operations without resorting to external funding will stay in the country’s EV race as overcapacity woes loom, analysts said.

“As the domestic market becomes saturated and overseas sales in developed economies are hampered by punitive tariffs, the key players will have to be very efficient in cost control and refrain from splashy spending to save powder for the tough business environment ahead,” said Chen Jinzhu, CEO of Shanghai Mingliang Auto Service, an industry consultancy.

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“The market has entered a new phase, with all companies expected to face a do-or-die moment soon.”

Among the four unprofitable, publicly traded Chinese premium EV builders – Nio, Xpeng, Geely unit Zeekr and Stellantis-backed Leapmotor – only Nio reported a wider net loss in the three months ending September, year on year. All of them have made plans to stem their losses.

The mismatch between capacity and actual demand is stark. By the end of 2023, EV assemblers in mainland China were capable of producing 17 million electric cars annually, and the overall factory utilisation rate stood at 54 per cent, according to Goldman Sachs.

The US bank predicted that additional capacity of 3.2 million units would be added this year, less than the 5.2 million units of capacity added in 2023.

The China Association of Automobile Manufacturers forecast full-year deliveries of more than 11 million units in 2024, which would represent 54.5 per cent of that total capacity of 20.2 million – nearly unchanged from a year earlier.

The mainland is home to about 50 EV assemblers, but He Xiaopeng, CEO of Xpeng, said last year that only eight players would remain by 2027, because smaller players will not be able to survive the fierce competition in the fast-growing industry.

To date, only BYD, the world’s largest EV builder, Li Auto, Tesla‘s nearest rival on the mainland, and Aito, backed by telecoms equipment giant Huawei Technologies, have eked out profits, while the bruising price war is ensnaring most of their domestic competitors.

Manufacturers hoping that international markets would help improve their bottom lines hit a speed bump this year after the US and the European Union decided to slap additional tariffs on Chinese-made electric cars.

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“The US and EU are two of the biggest automotive markets in the world,” said Gao Shen, an independent analyst in Shanghai. “Carmakers that are unable to take a considerable share in the two markets cannot be defined as powerful international marques. If demand is not enough, existing production facilities will be redundant.”

To survive, some companies are betting on new models to increase market share.

Xpeng president Brian Gu told Reuters on Wednesday that the carmaker, which counts Volkswagen as a minority shareholder, would break even next year, buoyed by strong demand for its new models.

The company posted a net loss of 1.81 billion yuan (US$249 million) for the quarter ending September, narrowing 53.5 per cent from the same period in 2023.

Leapmotor and Zeekr said early this year that they expected to break even in 2025.

A Nio ET5 sedan and EP9 sports car are pictured at a showroom in Berlin on August 17, 2023. Photo: Reuters alt=A Nio ET5 sedan and EP9 sports car are pictured at a showroom in Berlin on August 17, 2023. Photo: Reuters>

Nio, fresh off a US$471 million funding injection, expects to make a profit in 2026 after it debuts new models and a budget brand called Firefly, CEO William Li said during a results briefing on Tuesday.

China is the world’s largest automotive and EV market. The top players are at the global vanguard of the supply chain because they have capitalised on core technologies for batteries, self-driving technology and in-car entertainment, according to David Xu Daquan, China president of Bosch, the world’s largest car-parts supplier.

“Chinese electric-car makers will still look for opportunities abroad amid the goal of achieving carbon neutrality globally,” said David Zhang, general secretary of the International Intelligent Vehicle Engineering Association. “They need to be patient until some common ground can be achieved between Beijing and the foreign governments to avert trade friction.”

Last month, the EU voted to impose tariffs of up to 35.3 per cent on pure-electric cars made on the mainland. The new duties, which are on top of a standard 10 per cent tariff, will be in effect for five years.

The White House raised the tariff on Chinese-made EVs to 100 per cent from 25 per cent in August.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

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Nvidia (NASDAQ: NVDA) is one of the most-watched companies on the planet right now, thanks to its dominance in the hot growth area of artificial intelligence (AI). The tech giant holds an 80% share of the AI chip market, and this has translated into triple-digit revenue growth for its data center business quarter after quarter. That’s why all eyes were on Nvidia this week when the company reported fiscal 2025 third-quarter figures.

This market powerhouse once again surpassed analysts’ estimates for revenue and earnings per share, delivered record revenue, and maintained gross margin of more than 74%. Importantly, Nvidia also was optimistic about the future, predicting a 70% increase in fourth-quarter revenue year over year. But what really stood out were words from chief executive officer Jensen Huang. In fact, he delivered fantastic news for Nvidia investors.

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First, though, a bit of background on Nvidia’s path so far. As mentioned, Nvidia is a major player in the world of AI, a market that’s worth about $200 billion today and is forecast to reach $1 trillion by the end of the decade. The company is well-positioned to benefit as it sells not only the best-performing chips around, but also related products and services — such as networking tools and enterprise software. The company offers a full stack of AI, so customers can turn to Nvidia for any of their AI needs.

This has translated into soaring earnings and share-price performance, as well as major gains in free cash flow and return on invested capital over time.

Today, Nvidia has reached a particularly key moment. It’s in the process of launching its Blackwell architecture and best-performing chip yet. The company already has shipped 13,000 sample Blackwell chips to customers, and the Blackwell platform is in full production.

What about the fantastic news delivered by Nvidia’s chief? “Blackwell production is in full steam,” Jensen Huang said during the company’s earnings call. “We will deliver this quarter more Blackwells than we had previously estimated.”

This comment is key because it may eliminate one of the company’s biggest risks: potential supply chain or production snags early in the launch that could threaten delivery volume. Of course, demand still exceeds supply, and Nvidia expects this to continue. But this isn’t due to a problem with Nvidia’s processes. Instead, it’s because we’re in the early days of this AI revolution, and everyone aims to get on board with the best possible products — and Blackwell is at the top of the list.

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(Bloomberg) — A selloff in Chinese stocks deepened on Friday afternoon, as disappointing tech earnings hurt sentiment already weakened by concerns over Donald Trump’s imminent return.

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The mainland benchmark CSI 300 Index slumped 3.1%, the most since Oct. 9. The Hang Seng China Enterprises Index of Chinese stocks traded in Hong Kong lost 2.1%, capping a second straight week of losses. A gauge of Chinese tech stocks in Hong Kong tumbled into a technical bear market.

The retreat extends the market’s slide since an October peak, underscoring growing frustration over the pace of Beijing’s fiscal stimulus rollout and jitters over a potential escalation in US-China tensions. The disappointing earnings from consumption bellwether PDD Holdings Inc. and online search company Baidu Inc. have further dented confidence, with the latter’s shares briefly plunging 10% in Hong Kong following a decline in revenue.

Traders also pointed to statement by Texas Governor Greg Abbott dated Nov. 21, which prohibited state agencies from putting new money into investments originating from China and urged a divestment of previous holdings. That worsened fears that some of the largest US funds may avoid investing in China as part of political considerations.

The statement from Texas has affected “sentiment especially when the market is lacking momentum,” said Steven Leung, an executive director at UOB Kay Hian Hong Kong. Investors have also “found nothing has improved from property and equity to consumption — also no positive surprise from corporate earnings.’

Traders have looked to Chinese tech earnings to regain confidence over the economy’s trajectory, only to face the harsh reality of anemic consumer spending. Baidu Inc. recorded its biggest revenue drop in more than two years. PDD warned that its profitability will trend downward over time because of intensifying competition in its home market of China.

The Hang Seng Tech Index fell 2.6% on Friday, taking its decline from an October high to over 20%.

The market’s outlook has been under debate after a massive rally in late September, driven by monetary easing, lost momentum. Wall Street analysts including those at Morgan Stanley and CLSA have recently trimmed their recommendation on Chinese stocks. Some, however, have said a selloff will be an opportunity to add positions as Beijing likely has enough policy tools to counter US president-elect’s tariff proposals.

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Archer Aviation (NYSE: ACHR) has disappointed a lot of investors since its public debut three years ago. The developer of electric vertical take-off and landing (eVTOL) aircraft went public by merging with a special purpose acquisition company (SPAC), and it started trading at $9.90 and soared to a record high of $17.14 in February 2021. But today, Archer’s stock trades at about $4.

It crashed and burned as it missed its own pre-merger expectations, racked up steep losses, and issued a lot more shares to raise fresh cash. Rising interest rates also rattled investors and drove them away from its speculative pre-revenue business. However, analysts still have an average price target of $9.06 for Archer’s beaten-down stock. Should investors buy it today as it languishes more than 50% below that price?

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Archer’s Midnight eVTOL aircraft has a maximum speed of 150 miles per hour, a max range of 100 miles, and can carry a single pilot and four passengers. These electric aircraft are cheaper, cleaner, quieter, and easier to land in urban areas than helicopters, so they’re well suited for short-range air taxi services.

In early 2021, United Airlines placed a long-term $1 billion order for 200 of its Midnight aircraft. In 2022, it paid Archer a $10 million deposit for the first 100 aircraft. In 2023, automaker Stellantis invested in Archer and selected it as the exclusive contract manufacturer for its own eVTOL aircraft. Archer also secured additional deals with the U.S. Air Force and Future Flight Global.

Earlier this year, Soracle — a new joint venture formed by Japan Airlines and Sumimoto — followed United’s lead and placed a $500 million order for 100 Midnight aircraft. All of those deals could help Archer outlast its other competitors in the fragmented eVTOL market.

But for 2024, analysts expect Archer Aviation to generate less than $1 million in revenue as it racks up a net loss of $467 million. With an enterprise value of $1.43 billion, Archer trades at more than 2,000 times that sales estimate.

Prior to going public, Archer claimed it could produce its first 10 aircraft in 2024. But it only delivered its first Midnight aircraft to the U.S. Air Force this August, and it’s aiming to ramp up its annual production to 10 aircraft in 2025.

But looking further ahead, Archer plans to produce 48 aircraft in 2026, 252 aircraft in 2027, and 650 aircraft in 2028. It’s also establishing dedicated air taxi routes with its partners, and it expects to launch its first air taxi services in the UAE as early as the fourth quarter of 2025.

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