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APLD vs. DELL: Which AI Infrastructure Stock Has More Upside?
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Key Takeaways
Applied Digital develops hyperscale data centres tailored for AI and high-performance computing.
Dell Technologies provides AI-optimized servers and integrated systems for enterprises and hyperscalers.
APLD has outperformed DELL recently, reflecting investor preference for pure-play AI infrastructure.
Applied Digital (APLD - Free Report) and Dell Technologies (DELL - Free Report) are major players in the AI infrastructure space. While Applied Digital specializes in purpose-built data centres and high-performance computing facilities optimized for AI workloads, Dell Technologies focuses on AI-optimized servers, enterprise hardware and integrated data centre solutions.
Per MarketsandMarkets, the global AI infrastructure market is projected to grow from $182.07 billion in 2025 to $394.05 billion by 2030, registering a CAGR of 19.4% during this period. Both Applied Digital and Dell Technologies are expected to benefit from this rapid growth pace. So, APLD or DELL, which of these AI infrastructure stocks has the greater upside potential? Let's find out.
The Case for APLD
Applied Digital operates as a pure-play AI infrastructure developer focused exclusively on hyperscale data center campuses, differentiating from Dell Technologies' hardware-centric approach through long-term recurring lease revenues. The company has secured approximately $11 billion in contracted lease revenue with CoreWeave covering 400 megawatts at Polaris Forge 1, establishing long-term revenue visibility and positioning Applied Digital to generate approximately $500 million in annual net operating income once fully. While Dell Technologies ships AI servers generating immediate revenue, Applied Digital's lease model creates annuity-style cash flows with minimal ongoing capital requirements once facilities reach operational status, though the company remains concentrated on CoreWeave as its primary tenant.
The company has commenced construction on Polaris Forge 2, representing an additional 300 megawatts of initial capacity with potential expansion to 1 gigawatt. Applied Digital maintains 700 megawatts under construction across both campuses and a 4-gigawatt active development pipeline, supported by a $5 billion preferred equity facility with Macquarie Asset Management that could unlock $20 to $25 billion in total project financing capacity. The company's proprietary cooling design targets a power usage effectiveness ratio of 1.18, delivering operational cost advantages. However, Applied Digital operates with limited cash reserves relative to its debt obligations and capital-intensive development requirements, while construction timelines remain subject to potential supply chain factors and securing additional hyperscale lease commitments to support the pipeline.
The Zacks Consensus Estimate for APLD's second-quarter fiscal 2026 loss is pegged at 10 cents per share, unchanged over the past 30 days. Applied Digital reported a loss of 66 cents per share in the year-ago quarter.
Dell Technologies operates as an established AI infrastructure hardware supplier, differentiating from Applied Digital's facility leasing model through integrated equipment sales across servers, storage and networking systems. The company has generated $30 billion in cumulative AI server orders through the first nine months of fiscal 2026, establishing an $18.4 billion backlog that demonstrates strong demand from hyperscalers, cloud service providers and enterprise customers deploying AI infrastructure. Dell Technologies' hardware model delivers immediate revenue recognition upon equipment shipment with current profitability, providing near-term cash generation, though individual transactions offer shorter revenue visibility compared to APLD’s multi-year lease arrangements.
The business model provides infrastructure components to hyperscalers, with DELL performing tenant fit-out services at data centre facilities. Dell Technologies has established strategic partnerships with technology providers, including NVIDIA, securing design wins for next-generation GPU platforms like the GB300 architecture. The company's engineering capabilities enable AI rack deployment within 24-36 hours with uptime exceeding 99%, demonstrating operational execution. However, DELL faces significant commodity cost inflation affecting DRAM and NAND components used in AI servers, which compressed margins during the fiscal third quarter. The company operates in intensely competitive server markets where multiple manufacturers compete for hyperscaler orders, limiting pricing power and creating pressure on profitability. Additionally, AI server fulfilment converts backlog to revenues over 12-18 months, creating execution risk around component availability, manufacturing capacity and delivery timelines that could impact the company's ability to capitalise on current order momentum.
The Zacks Consensus Estimate for DELL’s fourth-quarter fiscal 2026 earnings is pegged at $3.46 per share, up by 33 cents over the past 30 days. The company reported earnings of $2.68 per share in the year-ago quarter.
Over the trailing six-month period, Applied Digital shares have surged 131.4%, while Dell Technologies shares have advanced merely 3%. APLD's significantly stronger performance reflects investor enthusiasm for pure-play AI infrastructure exposure and successful CoreWeave lease expansions. Dell Technologies' modest appreciation despite strong AI server order momentum suggests a measured market response to its diversified hardware approach, indicating investor preference for Applied Digital's concentrated hyperscale data center positioning over established technology equipment sales.
APLD vs. DELL Price Performance
Image Source: Zacks Investment Research
Applied Digital trades at a forward price-to-sales ratio of 15.71x, a premium reflecting its transition to high-margin recurring lease revenue and pure-play AI infrastructure positioning. Dell Technologies trades at 0.67x forward sales, corresponding with its mature hardware operations. Applied Digital's premium appears justified given long-term contracted visibility and superior anticipated margins, supporting stronger growth prospects than Dell's transactional hardware model within competitive equipment markets.
APLD vs. DELL Valuation
Image Source: Zacks Investment Research
Conclusion
Applied Digital's pure-play AI infrastructure positioning, high-margin recurring lease model and $11 billion in contracted revenues make it a stronger growth opportunity. The company's 700 megawatts under construction, Polaris Forge 2 and 4-gigawatt pipeline support robust expansion as hyperscale demand accelerates. Dell Technologies offers established profitability but faces commodity pressures and competitive dynamics that constrain growth potential. With a superior growth trajectory and six-month outperformance versus DELL, Applied Digital stands out as the more compelling investment for AI infrastructure exposure despite both stocks currently carrying a Zacks Rank #3 (Hold).
Image: Bigstock
APLD vs. DELL: Which AI Infrastructure Stock Has More Upside?
Key Takeaways
Applied Digital (APLD - Free Report) and Dell Technologies (DELL - Free Report) are major players in the AI infrastructure space. While Applied Digital specializes in purpose-built data centres and high-performance computing facilities optimized for AI workloads, Dell Technologies focuses on AI-optimized servers, enterprise hardware and integrated data centre solutions.
Per MarketsandMarkets, the global AI infrastructure market is projected to grow from $182.07 billion in 2025 to $394.05 billion by 2030, registering a CAGR of 19.4% during this period. Both Applied Digital and Dell Technologies are expected to benefit from this rapid growth pace. So, APLD or DELL, which of these AI infrastructure stocks has the greater upside potential? Let's find out.
The Case for APLD
Applied Digital operates as a pure-play AI infrastructure developer focused exclusively on hyperscale data center campuses, differentiating from Dell Technologies' hardware-centric approach through long-term recurring lease revenues. The company has secured approximately $11 billion in contracted lease revenue with CoreWeave covering 400 megawatts at Polaris Forge 1, establishing long-term revenue visibility and positioning Applied Digital to generate approximately $500 million in annual net operating income once fully. While Dell Technologies ships AI servers generating immediate revenue, Applied Digital's lease model creates annuity-style cash flows with minimal ongoing capital requirements once facilities reach operational status, though the company remains concentrated on CoreWeave as its primary tenant.
The company has commenced construction on Polaris Forge 2, representing an additional 300 megawatts of initial capacity with potential expansion to 1 gigawatt. Applied Digital maintains 700 megawatts under construction across both campuses and a 4-gigawatt active development pipeline, supported by a $5 billion preferred equity facility with Macquarie Asset Management that could unlock $20 to $25 billion in total project financing capacity. The company's proprietary cooling design targets a power usage effectiveness ratio of 1.18, delivering operational cost advantages. However, Applied Digital operates with limited cash reserves relative to its debt obligations and capital-intensive development requirements, while construction timelines remain subject to potential supply chain factors and securing additional hyperscale lease commitments to support the pipeline.
The Zacks Consensus Estimate for APLD's second-quarter fiscal 2026 loss is pegged at 10 cents per share, unchanged over the past 30 days. Applied Digital reported a loss of 66 cents per share in the year-ago quarter.
Applied Digital Corporation Price and Consensus
Applied Digital Corporation price-consensus-chart | Applied Digital Corporation Quote
The Case for DELL
Dell Technologies operates as an established AI infrastructure hardware supplier, differentiating from Applied Digital's facility leasing model through integrated equipment sales across servers, storage and networking systems. The company has generated $30 billion in cumulative AI server orders through the first nine months of fiscal 2026, establishing an $18.4 billion backlog that demonstrates strong demand from hyperscalers, cloud service providers and enterprise customers deploying AI infrastructure. Dell Technologies' hardware model delivers immediate revenue recognition upon equipment shipment with current profitability, providing near-term cash generation, though individual transactions offer shorter revenue visibility compared to APLD’s multi-year lease arrangements.
The business model provides infrastructure components to hyperscalers, with DELL performing tenant fit-out services at data centre facilities. Dell Technologies has established strategic partnerships with technology providers, including NVIDIA, securing design wins for next-generation GPU platforms like the GB300 architecture. The company's engineering capabilities enable AI rack deployment within 24-36 hours with uptime exceeding 99%, demonstrating operational execution. However, DELL faces significant commodity cost inflation affecting DRAM and NAND components used in AI servers, which compressed margins during the fiscal third quarter. The company operates in intensely competitive server markets where multiple manufacturers compete for hyperscaler orders, limiting pricing power and creating pressure on profitability. Additionally, AI server fulfilment converts backlog to revenues over 12-18 months, creating execution risk around component availability, manufacturing capacity and delivery timelines that could impact the company's ability to capitalise on current order momentum.
The Zacks Consensus Estimate for DELL’s fourth-quarter fiscal 2026 earnings is pegged at $3.46 per share, up by 33 cents over the past 30 days. The company reported earnings of $2.68 per share in the year-ago quarter.
Dell Technologies Inc. Price and Consensus
Dell Technologies Inc. price-consensus-chart | Dell Technologies Inc. Quote
Price Performance and Valuation of APLD and DELL
Over the trailing six-month period, Applied Digital shares have surged 131.4%, while Dell Technologies shares have advanced merely 3%. APLD's significantly stronger performance reflects investor enthusiasm for pure-play AI infrastructure exposure and successful CoreWeave lease expansions. Dell Technologies' modest appreciation despite strong AI server order momentum suggests a measured market response to its diversified hardware approach, indicating investor preference for Applied Digital's concentrated hyperscale data center positioning over established technology equipment sales.
APLD vs. DELL Price Performance
Image Source: Zacks Investment Research
Applied Digital trades at a forward price-to-sales ratio of 15.71x, a premium reflecting its transition to high-margin recurring lease revenue and pure-play AI infrastructure positioning. Dell Technologies trades at 0.67x forward sales, corresponding with its mature hardware operations. Applied Digital's premium appears justified given long-term contracted visibility and superior anticipated margins, supporting stronger growth prospects than Dell's transactional hardware model within competitive equipment markets.
APLD vs. DELL Valuation
Image Source: Zacks Investment Research
Conclusion
Applied Digital's pure-play AI infrastructure positioning, high-margin recurring lease model and $11 billion in contracted revenues make it a stronger growth opportunity. The company's 700 megawatts under construction, Polaris Forge 2 and 4-gigawatt pipeline support robust expansion as hyperscale demand accelerates. Dell Technologies offers established profitability but faces commodity pressures and competitive dynamics that constrain growth potential. With a superior growth trajectory and six-month outperformance versus DELL, Applied Digital stands out as the more compelling investment for AI infrastructure exposure despite both stocks currently carrying a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.