BofA Analyst Expects AI to Drive Server Market Growth by 25% CAGR Between 2024 and 2030

Dell and HPE are expected to benefit from rising AI server demand, with AI server revenues projected to grow at a 28% CAGR between 2024 and 2030, outpacing the overall server market growth. Dell's AI server revenue is expected to rise from $9.8 billion in 2024 to over $44 billion in 2027, while HPE's AI server revenue is expected to grow from $4.5 billion in 2024 to $20 billion by 2027.

The server market is poised for significant growth, driven primarily by the expanding demand for AI servers. According to BofA Securities analyst Wamsi Mohan, the server market revenues are expected to grow at an annual rate of 25% from 2024 to 2030, with AI servers leading the charge [1].

Mohan projects that AI server revenues will outpace overall server market growth, rising at a 28% CAGR compared to the broader market’s 25% CAGR. This growth is expected to be fueled by the increasing adoption of AI in various industries, including healthcare, finance, and manufacturing [1].

Dell Technologies and Hewlett Packard Enterprise (HPE) are positioned to be key beneficiaries of this growth. Mohan expects Dell’s AI server revenue to grow from $9.8 billion in 2024 to over $44 billion in 2027, while HPE’s AI server revenue is projected to reach $20 billion by 2027 [1].

The AI server market is expected to see a significant increase in unit shipments, with Mohan forecasting a 15% CAGR for AI server units compared to a 7.2% CAGR for total server units. This growth is expected to be driven by the demand for both training and inference servers, with training servers projected to grow at a 20% CAGR and inference servers at a 47% CAGR [1].

The increasing demand for AI servers is also expected to drive growth in the mission-critical server market. According to a LinkedIn article, the mission-critical server market size was valued at USD 12.5 billion in 2024 and is forecasted to grow at a CAGR of 7.5% from 2026 to 2033, reaching USD 20.8 billion by 2033 [2].

China, with its rapidly expanding digital economy and industrial sector, is expected to be a significant driver of growth in the mission-critical server market. The country’s data infrastructure, which includes over 1,000 data centers and a large digital population, is driving exponential demand for scalable and high-availability server systems [2].

The growth of the AI server market is also expected to be influenced by technological advancements and regulatory changes. The integration of newer GPUs, such as Nvidia’s Blackwell, into server designs is expected to drive demand for specialized hardware and liquid cooling systems [1].

In summary, the server market is expected to see significant growth in the coming years, driven by the increasing demand for AI servers. Dell Technologies and Hewlett Packard Enterprise are well-positioned to benefit from this growth, with their AI server revenues projected to rise significantly. The mission-critical server market is also expected to see robust growth, driven by factors such as China’s expanding digital economy and technological advancements.

References:
[1] https://www.benzinga.com/analyst-stock-ratings/analyst-color/25/07/46328802/dell-hpe-named-top-ai-server-plays-as-analyst-cites-14b-backlog
[2] https://www.linkedin.com/pulse/mission-critical-server-market-insights-key-growth-ewkof/