Dell Technologies Inc.

New York Stock Exchange
Back to all articles
Very Bullish +85

Dell vs. HPE: Which Top AI Server Stock Is the Better Buy?

AI-generated analysis

📈 Dell reported record Q2 revenue of $46.97 billion, a 58% year-over-year increase that surpassed analyst estimates.

💰 Adjusted EPS skyrocketed 203% to $7.04, crushing expectations by 41% and reaching a quarterly peak.

🤖 AI-optimized server revenue doubled to $16.4 billion, driving an 89% surge in Infrastructure Solutions Group sales.

🚀 Management raised FY27 revenue guidance from $167 billion to $192 billion, projecting 69% annual growth.

📊 Dell increased its AI-optimized server outlook to $74 billion, representing roughly 200% year-over-year growth.

🏆 Shares have surged over 320% year-to-date and more than 630% over the last three years.

🔝 IDC data places Dell first among server OEMs with a 16.5% worldwide revenue share.

💼 Dell holds a massive AI-server backlog and maintains extensive partnerships with Nvidia for accelerated computing.

📉 Despite a premium valuation of roughly 20x forward earnings, the stock trades beneath the S&P 500 multiple.

🔒 The company retains a Zacks Rank #1 (Strong Buy) rating based on favorable earnings estimate momentum.

Bullish Signals
  • Dell delivered record Q2 revenue of $46.97 billion, representing a 58% year-over-year surge that significantly beat estimates.
  • Adjusted EPS skyrocketed 203% to $7.04, crushing analyst expectations by 41% and reaching a new quarterly peak.
  • Infrastructure Solutions Group revenue jumped 89% to $31.8 billion, led by a 100% increase in AI-optimized server sales.
  • Management raised FY27 revenue guidance from $167 billion to $192 billion, projecting 69% annual growth.
  • The company boosted its AI-optimized server revenue outlook to $74 billion, forecasting roughly 200% year-over-year expansion.
  • Shares have skyrocketed more than 320% year-to-date and surged over 630% over the last three years.
  • Dell holds the top market position among server OEMs with a 16.5% worldwide revenue share according to IDC.
  • The company maintains extensive partnerships with Nvidia, integrating accelerated computing technology into its AI factories.
  • Despite a premium valuation, the stock trades beneath the S&P 500 price-to-earnings and sales multiples.
  • Analysts maintain a Zacks Rank #1 (Strong Buy) rating, indicating strong momentum in earnings estimates.
Full Analysis
Dell Technologies reported explosive fiscal Q2 results with revenue surging 58% year-over-year to a record $46.97 billion, significantly surpassing analyst estimates. Adjusted earnings per share skyrocketed 203% to $7.04, crushing expectations by 41%. The growth was primarily driven by the Infrastructure Solutions Group, where revenue jumped 89% to $31.8 billion, led by a doubling in AI-optimized server sales. Following these results, Dell raised its fiscal 2027 revenue guidance from $167 billion to $192 billion, projecting a 69% annual growth rate. Management also increased its outlook for AI-optimized server revenue to $74 billion and forecasted Q3 revenue of $49 billion with adjusted EPS of $6.50. This aggressive guidance reflects strong demand for AI infrastructure as corporate and hyperscale spending accelerates. In the broader market context, Dell shares have surged over 320% year-to-date and more than 630% over the last three years, outperforming competitor HPE. Despite trading at a premium valuation of roughly 20x forward earnings compared to HPE's 17x, analysts view Dell as the superior investment for maximum exposure to the AI infrastructure boom due to its massive backlog and market-leading position. Dell maintains a Zacks Rank #1 (Strong Buy) rating, indicating strong momentum in earnings estimates. The company is firmly entrenched in the expanding global server market, which is projected to reach nearly $1.03 trillion by 2033, driven by AI workloads and hybrid-cloud requirements.