Hewlett Packard Enterprise Company

New York Stock Exchange
Back to all articles
Bullish +75

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

AI-generated analysis

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

🚀 Dell's Infrastructure Solutions Group revenue jumped 89% to $31.8 billion, driven by a 100% increase in AI-optimized server sales.

📈 HPE posted record fiscal Q3 revenue of $12.21 billion, rising 34% year over year and topping analyst estimates.

🔗 HPE's Networking revenue surged 75% to $2.9 billion following the integration of Juniper Networks.

💰 Dell raised its FY27 revenue guidance from $167 billion to $192 billion, representing a 69% annual growth rate.

📉 HPE raised its full-year revenue growth forecast to a range of 34%-37% and adjusted EPS guidance to $3.75-$3.85.

💵 Dell's AI-optimized server revenue outlook was boosted from $60 billion to $74 billion, roughly 200% YoY growth.

📊 HPE's Cloud & AI revenue rose 25% to $9 billion, including a 35% increase in server revenue.

🏆 Dell shares have skyrocketed more than 320% year-to-date compared to HPE's climb of over 120%.

💰 HPE trades at roughly 17X forward earnings, offering a lower valuation multiple than Dell's 20X.

🤝 Both companies maintain extensive partnerships with Nvidia to integrate accelerated computing technology into their platforms.

📈 IDC data places Dell first among server OEMs with a 16.5% worldwide revenue share while HPE holds 3%.

🔮 Grand View Research projects the global server market will reach nearly $1.03 trillion by 2033.

🏅 Both Dell and HPE stocks currently sport a Zacks Rank #1 (Strong Buy) indicating positive earnings momentum.

📉 Dell's adjusted EPS is forecast to reach $25.50 annually, up 148% from the prior year.

Bullish Signals
  • HPE posted record fiscal Q3 revenue of $12.21 billion, a 34% year-over-year increase that topped analyst estimates.
  • HPE's Cloud & AI revenue rose 25% to $9 billion, driven by a 35% increase in server revenue and strong networking growth.
  • Management raised HPE's full-year revenue growth forecast to a range of 34%-37% and adjusted EPS guidance to $3.75-$3.85.
  • Networking revenue jumped 75% to $2.9 billion following the successful integration of Juniper Networks acquired for $14 billion.
  • HPE's FY27 framework calls for another 13%-17% revenue expansion and 16%-20% EPS growth, signaling long-term confidence.
  • HPE shares have climbed over 120% year-to-date, demonstrating strong market performance despite a lower valuation than peers.
  • The company maintains extensive partnerships with Nvidia, integrating the chip giant's technology into its AI factories and private-cloud infrastructure.
  • HPE is firmly entrenched in the projected global server market expansion, which is expected to reach nearly $1.03 trillion by 2033.
Full Analysis
Dell Technologies and Hewlett Packard Enterprise (HPE) are competing heavily in enterprise infrastructure, with both companies posting record earnings driven by explosive growth in AI servers and hybrid-cloud demand. Dell reported fiscal Q2 revenue of $46.97 billion, a 58% year-over-year surge, while HPE posted record fiscal Q3 revenue of $12.21 billion, up 34%. Both companies significantly raised their full-year and multi-year guidance, reflecting strong corporate and hyperscale spending acceleration. Dell's Infrastructure Solutions Group revenue jumped 89% to $31.8 billion, led by a 100% increase in AI-optimized server revenue to $16.4 billion. Consequently, Dell raised its FY27 revenue guidance from $167 billion to $192 billion and adjusted EPS outlook to $25.50. HPE also saw strong performance with Cloud & AI revenue rising 25% to $9 billion and Networking revenue jumping 75% following the integration of Juniper Networks. The article compares the two stocks, noting that while Dell shares have outperformed with a 320% year-to-date gain, HPE offers a lower valuation trading at roughly 17X forward earnings compared to Dell's 20X. Both companies maintain extensive partnerships with Nvidia and are positioned to benefit from a projected global server market reaching nearly $1.03 trillion by 2033. Analysts conclude that Dell currently holds the slight edge for maximum AI infrastructure exposure, though HPE remains an attractive alternative for value-oriented investors.