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Dell's AI Data Center Expansion Gains Pace: What Lies Ahead?
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Key Takeaways
Dell exited fiscal 2026 with a record $43B AI backlog after $64.1B in AI orders.
DELL expects AI revenues to nearly double to about $50B in fiscal 2027.
Hudson River Trading expanded its Dell partnership for AI research and trading infrastructure.
Dell Technologies (DELL - Free Report) is rapidly expanding its AI data center footprint as surging demand for AI infrastructure continues to reshape the company’s growth trajectory. In fiscal 2026, Dell recorded $64.1 billion in AI orders and shipped $25.2 billion worth of AI servers. DELL exited fiscal 2026 with a record $43 billion AI backlog, reflecting strong momentum in enterprise and hyperscale AI deployments.
Dell’s AI-optimized server business has emerged as a major revenue driver. In the fourth quarter of 2026 alone, the company booked $34.1 billion in AI orders and shipped $9.5 billion in AI servers. The company expects AI revenues to nearly double to approximately $50 billion in fiscal 2027. Dell now serves more than 4,000 AI customers across enterprises, sovereign entities and cloud providers, highlighting broad-based adoption of AI infrastructure solutions.
An expanding enterprise clientele is positive for DELL’s prospects. Hudson River Trading has launched a new AI research data center at Lefdal Mine Data Centers, powered by Dell AI Factory infrastructure, including direct liquid-cooled Dell PowerEdge XE9685L servers equipped with AMD EPYC processors and NVIDIA HGX B200 systems.
Dell’s engineering expertise, deployment speed, liquid-cooling capabilities and end-to-end lifecycle services continue to strengthen its position in the AI infrastructure market. Combined with its strong supply-chain management and growing enterprise AI adoption, Dell appears well-positioned to sustain long-term revenue growth as AI data center investments accelerate globally.
DELL Faces Stiff Competition in the AI Server Business
Super Micro Computer (SMCI - Free Report) is a strong competitor to DELL in AI servers, driven by fast innovation and advanced engineering. SMCI’s rack-scale systems and DCBBS solutions help customers deploy AI data centers quickly and efficiently. The company benefits from strong demand for GPU-based servers and close partnerships with NVIDIA and AMD. Its global manufacturing expansion strengthens supply capabilities, though margins face pressure from rising costs and customer concentration.
Hewlett Packard Enterprise (HPE - Free Report) competes with Dell Technologies through its enterprise-focused AI strategy and GreenLake cloud platform. HPE offers end-to-end solutions combining servers, storage, networking and software, strengthened by the Juniper Networks acquisition. The company is benefiting from strong enterprise AI demand and a growing backlog. Its AI Factory approach and flexible consumption model set it apart, while strong networking capabilities support AI workloads, making it a stable competitor in enterprise and sovereign AI markets.
Shares of Dell Technologies have appreciated 100.8% year to date, outperforming the broader Zacks Computer & Technology sector and the Zacks Computer - Micro Computers industry’s increase of 16.6% and 12.9%, respectively.
Image Source: Zacks Investment Research
From a valuation standpoint, its forward price-to-earnings ratio of 18.96 is significantly lower than the industry’s average of 31.46. The company carries a Value Score of B.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for fiscal 2027 earnings is pegged at $12.84 per share, increasing 2 cents over the past 30 days. This suggests 24.6% year-over-year growth.
View the Zacks #1 Rank List
Image: Bigstock
Dell's AI Data Center Expansion Gains Pace: What Lies Ahead?
Key Takeaways
Dell Technologies (DELL - Free Report) is rapidly expanding its AI data center footprint as surging demand for AI infrastructure continues to reshape the company’s growth trajectory. In fiscal 2026, Dell recorded $64.1 billion in AI orders and shipped $25.2 billion worth of AI servers. DELL exited fiscal 2026 with a record $43 billion AI backlog, reflecting strong momentum in enterprise and hyperscale AI deployments.
Dell’s AI-optimized server business has emerged as a major revenue driver. In the fourth quarter of 2026 alone, the company booked $34.1 billion in AI orders and shipped $9.5 billion in AI servers. The company expects AI revenues to nearly double to approximately $50 billion in fiscal 2027. Dell now serves more than 4,000 AI customers across enterprises, sovereign entities and cloud providers, highlighting broad-based adoption of AI infrastructure solutions.
An expanding enterprise clientele is positive for DELL’s prospects. Hudson River Trading has launched a new AI research data center at Lefdal Mine Data Centers, powered by Dell AI Factory infrastructure, including direct liquid-cooled Dell PowerEdge XE9685L servers equipped with AMD EPYC processors and NVIDIA HGX B200 systems.
Dell’s engineering expertise, deployment speed, liquid-cooling capabilities and end-to-end lifecycle services continue to strengthen its position in the AI infrastructure market. Combined with its strong supply-chain management and growing enterprise AI adoption, Dell appears well-positioned to sustain long-term revenue growth as AI data center investments accelerate globally.
DELL Faces Stiff Competition in the AI Server Business
Super Micro Computer (SMCI - Free Report) is a strong competitor to DELL in AI servers, driven by fast innovation and advanced engineering. SMCI’s rack-scale systems and DCBBS solutions help customers deploy AI data centers quickly and efficiently. The company benefits from strong demand for GPU-based servers and close partnerships with NVIDIA and AMD. Its global manufacturing expansion strengthens supply capabilities, though margins face pressure from rising costs and customer concentration.
Hewlett Packard Enterprise (HPE - Free Report) competes with Dell Technologies through its enterprise-focused AI strategy and GreenLake cloud platform. HPE offers end-to-end solutions combining servers, storage, networking and software, strengthened by the Juniper Networks acquisition. The company is benefiting from strong enterprise AI demand and a growing backlog. Its AI Factory approach and flexible consumption model set it apart, while strong networking capabilities support AI workloads, making it a stable competitor in enterprise and sovereign AI markets.
DELL’s Share Price Performance, Valuation & Estimates
Shares of Dell Technologies have appreciated 100.8% year to date, outperforming the broader Zacks Computer & Technology sector and the Zacks Computer - Micro Computers industry’s increase of 16.6% and 12.9%, respectively.
Image Source: Zacks Investment Research
From a valuation standpoint, its forward price-to-earnings ratio of 18.96 is significantly lower than the industry’s average of 31.46. The company carries a Value Score of B.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for fiscal 2027 earnings is pegged at $12.84 per share, increasing 2 cents over the past 30 days. This suggests 24.6% year-over-year growth.
Dell Technologies Inc. Price and Consensus
Dell Technologies Inc. price-consensus-chart | Dell Technologies Inc. Quote
DELL currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.