Dell Technologies CEO Michael Dell said Tuesday that while demand for computing power is “tremendous,” the production of artificial intelligence data centers will eventually top out.

“I’m sure at some point there’ll be too many of these things built, but we don’t see any signs of that,” Dell said on “Closing Bell: Overtime.”

The hardware maker’s server networking business grew 58% last year and was up 69% last quarter, Dell said. As large language models have evolved to more multimodal and multi-agent systems, the demand for AI processing power and capacity has continued to be strong.

Dell’s AI servers are powered by Nvidia‘s Blackwell Ultra chips. The company then sells its devices to customers like cloud service provider CoreWeave and xAI, Elon Musk’s startup.

Dell shares rose over 3% Tuesday after increasing its expected long-term revenue and profit growth in an analyst meeting.

The computer maker raised its expected annual revenue growth to 7% to 9%, up from its previous target of 3% to 4%, with diluted earnings per share now expected to be 15% higher, up from its previous 8% target.

The company reported strong second-quarter earnings in August, and said it planned to ship $20 billion worth of AI servers in fiscal 2026. That is double what it sold last year.

Thoma Bravo co-founder Orlando Bravo said that valuations for artificial intelligence companies are “at a bubble,” comparing it to the dotcom era.

But one key difference in the market now, he said, is that large companies with “healthy balance sheets” are financing AI businesses.

Bravo’s private equity firm boasts more than $181 billion in assets under management as of June, and focuses on buying and selling enterprise tech companies, with a significant chunk of its portfolio invested in cybersecurity.

Bravo told CNBC’s “Squawk on the Street” on Tuesday that investors can’t value a $50 million annual recurring revenue company at $10 billion.

“That company is going to have to produce a billion dollars in free cash flow to double an investor’s money, ultimately,” he said. “Even if the product is right, even if the market’s right, that’s a tall order, managerially.”

OpenAI recently finalized a secondary share sale that would value the ChatGPT-maker at $500 billion. The company is projected to make $13 billion in revenue for 2025.

Nvidia recently said it would invest up to $100 billion in OpenAI, in part, to help the ChatGPT maker lease its chips and build out supercomputing facilities in the coming years.

Other public companies have soared on AI promises, with Palantir’s market cap climbing to $437 billion, putting it among the 20 most valuable publicly traded companies in the U.S., and AppLovin now worth $213 billion.

Even early-stage valuations are massive in AI, with Thinking Machines Lab notching a $12 billion valuation on a $2 billion seed round.

Despite the inflated numbers, Bravo emphasized that there’s a “big difference” between the dotcom collapse and the current landscape of AI.

“Now you have some really big companies and some big balance sheets and healthy balance sheets financing this activity, which is different than what happened roughly 25 years ago,” he said.

Oracle stock slipped 5% on Tuesday after a report from The Information that raised questions about the company’s plans to buy billions of Nvidia chips to rent as a cloud provider to clients like OpenAI.

Oracle had 14% gross margins on $900 million in sales in its Nvidia cloud business in the three months ending in August, according to the report, which cited internal documents. That’s significantly lower than Oracle’s overall gross margin of around 70%.

The report said that Oracle’s recent transformation into one of the most important cloud and artificial intelligence companies may run into profitability challenges because of how expensive Nvidia chips are and aggressive pricing on its AI chip rentals.

In September, Oracle said that its backlog of cloud contracts, which it called remaining performance obligations, had jumped 359% in a year. It forecasted $144 billion in cloud infrastructure revenue in 2030, up from just over $10 billion in 2025.

Much of that forecasted revenue is from Oracle’s role in the Stargate project, in which the enterprise vendor is working with OpenAI to open five massive data centers filled with AI chips from Nvidia.