Hewlett Packard Enterprise (HPE Quick QuoteHPE - Free Report) and Dell Technologies (DELL Quick QuoteDELL - Free Report) are two important players in the AI infrastructure space, providing organizations with server-based capabilities that deliver high computing power. DELL’s broad portfolio across AI servers, traditional compute and storage is gaining from sustained AI infrastructure demand as customers secure capacity and modernize data centers. Hewlett Packard Enterprise provides solutions for high-performance computing, supercomputing, AI, data analytics and transaction processing.

HPE’s storage portfolio includes HPE Alletra, unstructured data solutions, data protection, GreenLake Flex and software. Considering the unprecedented growth forecast of the AI market, both companies are likely to capitalize on the emerging trends. Given this scenario, let's closely examine the fundamentals of the two companies, so investors can make an informed bet.

The Case for HPE Stock

Hewlett Packard Enterprise’s AI infrastructure portfolio spans servers, storage, networking and private cloud capabilities, allowing customers to deploy AI workloads across data centers and hybrid environments. In the third quarter of fiscal 2026, Cloud & AI revenues rose 25.4% year over year to $9.04 billion, while server revenues increased 35.3%. HPE’s AI Systems orders reached $2.4 billion, up more than 30% sequentially, and AI Systems backlog climbed 14% to $6.8 billion.

HPE also secured a $3.5 billion inferencing deal with a hyperscaler after quarter-end, highlighting the increasing scale of enterprise AI deployments. Networking is emerging as another important AI growth engine. HPE has expanded its exposure to data center switching, routing, campus and branch networking, as well as security. Networking revenues reached $2.89 billion in the third quarter, while normalized orders increased 36%, materially faster than revenues.

Networks-for-AI orders totaled $700 million during the third quarter of fiscal 2026 and $2.2 billion cumulatively, prompting HPE to raise its fiscal 2026 target to $2.5-$3 billion. These factors have led HPE to report a record total AI backlog of $7.6 billion exiting the quarter, while management indicated that its broader pipeline remains multiples of backlog. However, Hewlett Packard Enterprise faces supply constraints in GPUs, SSDs and memory.

Furthermore, HPE’s inventory reached $11.8 billion as of July 31, 2026, compared with $6.4 billion at fiscal 2025 year-end. Logistics and commodity costs, along with inventory built ahead of demand, can delay shipments and weigh on margins. Nevertheless, HPE has a robust bottom line, with the Zacks Consensus Estimate for HPE’s fiscal 2026 earnings pegged at $3.81 per share, implying year-over-year growth of 96%. Estimates have been revised upward in the past 30 days.

Image Source: Zacks Investment Research

The Case for DELL Stock

Dell Technologies continues to see AI server demand exceed available supply as customers expand deployments across neocloud, sovereign and enterprise environments. In the second quarter of fiscal 2027, DELL booked a record $60.9 billion of AI orders and recognized $16.4 billion of AI server revenues. DELL’s orders totaled $131.7 billion over the past 12 months, while backlog rose to $95 billion from $51.3 billion at the end of the first quarter of fiscal 2027.

DELL’s opportunity pipeline also grew sequentially and remained multiples of backlog after Dell Technologies converted more than $130 billion into orders over the prior year. Customer count surpassed 6,500, showing broader adoption beyond the largest AI buyers. DELL’s engineering, rack-scale design, deployment and services capabilities help address complex requirements around workload performance, power, cooling and data center design.

Dell Technologies expects roughly $19 billion of AI server revenues in the third quarter of fiscal 2027 and raised full-year fiscal 2027 AI server revenue guidance to $74 billion, about three times the prior year. This demand visibility and higher full-year outlook support continued AI infrastructure growth for the company. The company also offers financing flexibility for AI solutions and data centers, which can help customers manage large deployments.

DELL’s ecosystem includes NVIDIA, AMD, OpenAI, Meta, Palantir, Mistral AI, Google Cloud, Reflection, Hugging Face and Glean, making it easier and more lucrative to integrate into the workflow. The Zacks Consensus Estimate for DELL’s fiscal 2027 earnings is pegged at $26.11 per share, implying year-over-year growth of 154%. Estimates have been revised upward in the past seven days.

Image Source: Zacks Investment Research

Stock Price Performance and Valuation of SMCI & HPE

In the year-to-date period, shares of DELL and HPE have rallied 336.5% and 159.5%, respectively.

YTD Performance Chart

Image Source: Zacks Investment Research

DELL is trading at a forward 12-month ratio of 1.60X, which is higher than its median of 0.90X. HPE is trading at a forward sales multiple of 1.53X, much below its median of 0.82X.

Forward 12-Month (P/S) Valuation Chart

Image Source: Zacks Investment Research

Conclusion: HPE vs. DELL

While both Hewlett Packard Enterprise and Dell Technologies are well positioned to benefit from sustained AI infrastructure spending, DELL appears better positioned based on the stronger scale and visibility of its AI business. DELL’s record $60.9 billion in AI orders, $95 billion backlog and raised fiscal 2027 AI server revenue guidance of $74 billion demonstrate significantly stronger demand visibility. Its AI server customer base has also expanded to more than 6,500 organizations, while its partnerships across the AI ecosystem strengthen its ability to capture workloads across enterprise and hyperscale environments. Given these factors, we suggest DELL is a safer bet right now. DELL sports a Zacks Rank #1 (Strong Buy), while HPE carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.