Cramer Picks Dell over Super Micro Despite Strong AI Demand
Dell and Super Micro are both riding a wave of artificial intelligence demand, but a persistent accounting issue keeps the latter off the recommendation list for many investors.
The AI server market is booming, with both Dell Technologies and Super Micro Computer reporting record-breaking backlogs. However, financial commentator Jim Cramer has once again sided with Dell, citing unresolved accounting irregularities at Super Micro. According to reporting from GN technics/ai (en-US), Cramer told a caller that while he sees momentum in Super Micro, he cannot recommend the stock due to his concerns about its financial reporting controls.
Cramer's stance is consistent with his views expressed earlier this year. In March and April, he explicitly advised investors to choose Dell over Super Micro, stating that accounting issues in his book equate to a sell. He maintains that Dell remains an attractive option even after its recent price increase, while Super Micro’s internal control weaknesses create a level of risk he is unwilling to endorse.
Both Companies Report Record AI Backlogs
The underlying business performance for both firms is strong, driven by intense demand for AI infrastructure. Super Micro announced it had secured over $60 billion in new orders, entering its fiscal 2027 with a record backlog. The company’s CEO noted that accelerating demand is helping improve profitability through a more diverse enterprise customer base.
Dell has also seen significant growth, reporting $60.9 billion in AI-server orders for its fiscal second quarter of 2027. The company holds a record $95 billion in AI-optimized server backlogs and achieved record revenue of $47 billion in the quarter. Dell’s leadership suggests that IT environments are shifting from cost centers to key value drivers, prompting customers to invest heavily in these technologies.
Accounting Weaknesses Cloud Super Micro’s Prospects
The primary differentiator for investors is risk. Super Micro’s latest annual filing disclosed that its internal control over financial reporting was not effective as of June 30, 2026. This was due to an unresolved material weakness involving information-technology general controls. While the company has remediated three previous weaknesses, the remaining issue requires further testing and assessment. Its independent auditor, BDO USA, issued an adverse opinion on these internal controls, though not on the accuracy of the financial statements themselves.
Dell Faces Supply Chain Constraints
Dell does not have the same disclosed internal-control issues in its latest filing, reporting effective controls over financial reporting. However, it faces its own set of challenges, including competitive pressures and reliance on third-party suppliers. The company has identified dependencies on single-source and limited-source suppliers as potential risks. Additionally, recent reports indicate that demand for AI solutions continues to outpace supply, with constraints on memory chips and other components affecting the broader AI supply chain.
