So, there's been some chatter about Nvidia Corp (NVDA) maybe buying Dell Technologies Inc (DELL) to build some kind of AI superpower. Gene Munster, a managing partner at Deepwater Asset Management, went on CNBC's "Fast Money" on Tuesday to pour some very cold water on that idea.
His main reason? The math just doesn't work. Nvidia is running at a stunning 60% operating margin. Dell is at 7%. That's not a gap; it's a chasm. Munster says trying to explain to investors why you'd buy a company with margins that much lower, while you're already navigating your own incredible profit opportunity, would be a messaging nightmare. It's like a Michelin-starred chef deciding to also run a fast-food joint—the business models don't exactly align.
Where did this rumor even come from? Munster gets it. The idea of building an end-to-end AI powerhouse—combining the chips, the servers, the software, the services—is a compelling long-term theme. No single company has fully pulled it off yet, and the AI market is still young. So, the speculation makes sense on a conceptual level. It's just that, in practice, a Nvidia-Dell deal right now seems highly unlikely.
If not Nvidia, then who? Munster suggests that companies like Advanced Micro Devices, Inc (AMD) or Intel Corp (INTC) might be more logical suitors for a firm like Dell as part of a broader turnaround or competitive strategy. But even there, he's not betting the farm. He puts the probability of such deals happening at below 50%.
Here's another big reason Nvidia is probably out: its own checkbook. Munster notes that Nvidia plans to invest around $80 billion in the coming years. Stacking another massive acquisition on top of that capital expenditure plan is a good way to give your shareholders heartburn. Investors are focused on Nvidia executing its core, high-margin AI play, not on digesting a complex, lower-margin hardware integration.
As for the market's reaction on Tuesday, Nvidia shares were up 2.59% at $194.22, while Dell shares were down 3.21% at $183.70 at the time of publication, according to market data.
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