Dell Technologies DELL is benefiting significantly from its robust partner network, which has been a key driver of growth in its Infrastructure Solutions Group (“ISG”). In the first quarter of fiscal 2027, ISG revenues surged 181% year over year to a record $29 billion, while total revenues rose 88% to $43.8 billion. The company continues to strengthen the Dell AI Factory through collaborations with NVIDIA, Google Cloud, OpenAI, xAI, ServiceNow, Palantir, Mistral and CrowdStrike, enabling integrated AI solutions across compute, storage, networking, software and services.
A key catalyst is Dell’s growing partnership with NVIDIA. The newly announced PowerEdge R9822 and M9822 servers powered by NVIDIA Vera CPUs expand the Dell AI Factory portfolio and support agentic AI workloads, including data processing, retrieval, orchestration and runtime operations. Dell also enhanced support for NVIDIA networking, AI software, digital twins and robotics technologies, further strengthening its end-to-end AI infrastructure offerings.
Dell recently became the first company to ship NVIDIA Vera Rubin-based systems to CoreWeave. Its PowerRack platform, powered by NVIDIA Vera Rubin NVL72, delivers up to 10 times lower AI inference cost per token than previous-generation systems, improving the economics of large-scale agentic AI deployments.
The company’s AI server business has been a key catalyst. AI-optimized server revenues reached $16.1 billion during the fiscal first quarter, and Dell expects approximately $60 billion in AI server revenues for fiscal 2027. The company’s AI customer base now exceeds 5,000 organizations across enterprise, sovereign and neocloud markets.
Dell Technologies’ innovative portfolio, expanding partner base and increasing AI footprint are significant growth drivers. For the second quarter of fiscal 2027, Dell expects revenues between $44 billion and $45 billion, up roughly 50% at the midpoint of $44.5 billion. ISG is expected to grow roughly 75%, supported by $15.5 billion in AI server revenues.
Dell’s AI Infrastructure Push Faces Tough Rivals
Dell Technologies is a major player in the AI infrastructure market but faces stiff competition from Super Micro Computer SMCI and Hewlett Packard Enterprise HPE.
Super Micro Computer is strengthening its AI infrastructure business through its Data Center Building Block Solutions (“DCBBS”), which provides end-to-end data center solutions, including liquid cooling, networking, power systems, software and services. The company highlighted its industry-leading time-to-online capabilities, helping customers deploy AI factories faster and more efficiently. Strong engineering expertise, design-for-manufacturing initiatives and factory automation are improving production speed, quality and margins. Super Micro Computer continues to expand partnerships with NVIDIA, AMD, Intel and Arm while increasing manufacturing capacity globally. Management believes DCBBS, software and services will become significant profit drivers as demand for AI infrastructure continues to grow.
HPE is benefiting from strong AI and networking demand, with AI systems orders reaching $1.8 billion and expanding into orchestration, data movement and agentic AI workloads. Record backlog and a pipeline multiple times larger than the backlog support growth visibility. HPE is seeing rising demand for high-memory servers and AI inference, while the Juniper integration is driving networking momentum and cross-selling opportunities. Management expects durable demand, sustained AI adoption and continued growth across its Cloud & AI and Networking businesses through fiscal 2027.
DELL’s Share Price Performance, Valuation & Estimates
Shares of Dell have gained 213.3% year to date, outperforming the broader Computer & Technology sector and the Zacks Computer - Micro Computers industry’s growth of 16.1% and 17.2%, respectively.
DELL’s YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, its forward price-to-earnings ratio of 26.25 is significantly below the industry’s average of 32.4.
DELL’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for fiscal 2027 earnings is pegged at $14.54 per share, increasing 9.9% over the past 30 days. This suggests 41.17% year-over-year growth.
Dell Technologies Inc. Price and Consensus
Dell Technologies Inc. price-consensus-chart | Dell Technologies Inc. Quote
DELL currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Dell Technologies Inc. (DELL): Free Stock Analysis Report
Super Micro Computer, Inc. (SMCI): Free Stock Analysis Report
Hewlett Packard Enterprise Company (HPE): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).