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DELL vs. APLD: Which AI-Infrastructure Stock Looks More Attractive?
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Key Takeaways
Dell is the stronger AI infrastructure pick, with a $95B AI server backlog and expanding profitability.
Applied Digital has a $36B contracted pipeline but faces $6.4B in debt, rising interest costs and losses.
Dell's forward P/S of 1.4 undercuts Applied Digital's 5.27, while Dell's shares have surged 259.1% YTD.
Dell Technologies (DELL - Free Report) and Applied Digital (APLD - Free Report) offer investors two distinct ways to capitalize on the rapidly expanding AI infrastructure market. Dell provides AI-optimized servers, networking equipment and storage solutions that power enterprise and hyperscale AI deployments. Applied Digital, meanwhile, develops and operates large-scale data centers designed to support high-performance computing and AI workloads.
Both companies are benefiting from accelerating AI infrastructure investments, but their business models differ considerably. Dell monetizes demand through hardware and infrastructure solutions, while Applied Digital focuses on generating long-term revenues from hyperscaler data-center leases.
With AI infrastructure spending accelerating, their latest financial performance, growth prospects and operating risks make this comparison particularly relevant. Let’s dive deep and closely compare the fundamentals of the two stocks to determine which one is a better investment now.
The Case for DELL
Dell is benefiting from surging demand for AI-optimized servers as enterprises, hyperscalers and neocloud providers accelerate infrastructure investments. In second-quarter fiscal 2027, AI server revenues doubled year over year to $16.4 billion, driving Infrastructure Solutions Group (ISG) revenues up 89% to $31.8 billion. ISG operating income surged 225% to $4.8 billion, with operating margin expanding to 15%.
Customer momentum remains impressive. Dell secured a record $60.9 billion in AI server orders during the quarter, bringing its backlog to $95 billion. Its AI customer base surpassed 6,500 across neocloud, sovereign and enterprise customers. Strong engineering capabilities, global supply-chain scale and advanced NVIDIA-based infrastructure solutions strengthen Dell’s competitive positioning.
The AI infrastructure boom is also creating opportunities beyond specialized servers. Traditional servers and networking revenues jumped 122% year over year, while storage revenues increased 26%, supported by infrastructure modernization and growing data-management requirements.
Dell raised its fiscal 2027 revenue guidance to $192 billion, with AI server revenues projected to reach $74 billion, approximately three times the prior-year level. Second-quarter operating cash flow of $2.2 billion further underscores its financial strength.
However, an increasing AI-server revenue mix could pressure gross margins. Component inflation, supply constraints, elevated inventories and rapidly evolving hardware requirements also pose execution risks.
The Case for APLD
Applied Digital's aggressive AI data-center expansion presents substantial financial and operational challenges. As of Aug. 31, 2026, the company carried approximately $6.4 billion in debt against $3.7 billion in cash and restricted cash. Cash used in investing activities surged to $2.1 billion in first-quarter fiscal 2027 from $249.9 million a year earlier, reflecting heavy construction spending.
Profitability remains another concern. Despite revenues surging 322% year over year to $341.9 million, the company reported a GAAP net loss attributable to common shareholders from continuing operations of $221 million, compared with $18.5 million in the prior-year quarter. Interest expenses also jumped to $77.4 million from $8 million, highlighting the growing financing burden.
Moreover, customer concentration adds uncertainty. Three customers accounted for 88% of first-quarter revenues, including 56% from one customer. The company also faces risks associated with construction delays, power availability, permitting restrictions, equipment shortages and cost overruns. Revenue growth was partly supported by $183.5 million in tenant fit-out services, raising questions about the sustainability of the current growth rate.
Nevertheless, Applied Digital's contracted pipeline offers meaningful long-term potential. Its 1.41-GW portfolio across five campuses represents approximately $36 billion in base-term contracted revenues. Polaris Forge 1 reached 250 MW of operational capacity after quarter-end, while long-term hyperscaler leases provide revenue visibility.
Earnings Estimates Comparison for DELL and APLD
The Zacks Consensus Estimate for DELL’s fiscal 2027 EPS is pegged at $26.09 per share, reflecting expectations of robust earnings growth. The Zacks Consensus Estimate has held steady over the past 30 days but risen over the past 60 days, pointing to projected year-over-year growth of 153.3%.
Image Source: Zacks Investment Research
While DELL’s earnings estimates have improved, APLD’s estimates have moved in the opposite direction. The Zacks Consensus Estimate forecasts a fiscal 2027 loss of $2.06 per share and has been revised downward over the past 30 and 60 days, pointing to a wider loss than fiscal 2026’s 91 cents per share.
Image Source: Zacks Investment Research
DELL & APLD’s Share Performance Trajectory
Dell has decisively outperformed Applied Digital year to date, with DELL’s shares soaring 259.8% against APLD’s 22.2% decline. Dell's advantages include its established enterprise customer base, global supply chain, profitability and strong AI server demand.
DELL vs. APLD Stock’s Performance
Image Source: Zacks Investment Research
Valuation Considerations
The key difference between the two stocks lies in their valuations. DELL trades at a forward 12-month P/S ratio of 1.3, relatively cheaper than APLD’s 4.79, indicating that investors pay considerably less for each dollar of DELL’s expected sales, even though DELL has delivered substantially higher stock returns.
DELL vs. APLD: P/S F12M Ratio
Image Source: Zacks Investment Research
Conclusion: DELL Is the Better Investment Bet Now
Dell appears better positioned than Applied Digital, supported by strong AI server demand, a record order backlog, improving operating profitability and robust cash flow. Its established business model, diversified customer base and lower forward price-to-sales ratio offer a more attractive risk-reward profile. In contrast, APLD’s heavy debt burden, rising interest expenses, widening losses and customer concentration increase execution risks. Despite APLD’s long-term growth potential, DELL offers stronger financial stability and earnings visibility today.
Currently, DELL sports a Zacks Rank #1 (Strong Buy), while APLD carries a Zacks Rank #5 (Strong Sell).
View the Zacks #1 Rank List
Image: Shutterstock
DELL vs. APLD: Which AI-Infrastructure Stock Looks More Attractive?
Key Takeaways
Dell Technologies (DELL - Free Report) and Applied Digital (APLD - Free Report) offer investors two distinct ways to capitalize on the rapidly expanding AI infrastructure market. Dell provides AI-optimized servers, networking equipment and storage solutions that power enterprise and hyperscale AI deployments. Applied Digital, meanwhile, develops and operates large-scale data centers designed to support high-performance computing and AI workloads.
Both companies are benefiting from accelerating AI infrastructure investments, but their business models differ considerably. Dell monetizes demand through hardware and infrastructure solutions, while Applied Digital focuses on generating long-term revenues from hyperscaler data-center leases.
With AI infrastructure spending accelerating, their latest financial performance, growth prospects and operating risks make this comparison particularly relevant. Let’s dive deep and closely compare the fundamentals of the two stocks to determine which one is a better investment now.
The Case for DELL
Dell is benefiting from surging demand for AI-optimized servers as enterprises, hyperscalers and neocloud providers accelerate infrastructure investments. In second-quarter fiscal 2027, AI server revenues doubled year over year to $16.4 billion, driving Infrastructure Solutions Group (ISG) revenues up 89% to $31.8 billion. ISG operating income surged 225% to $4.8 billion, with operating margin expanding to 15%.
Customer momentum remains impressive. Dell secured a record $60.9 billion in AI server orders during the quarter, bringing its backlog to $95 billion. Its AI customer base surpassed 6,500 across neocloud, sovereign and enterprise customers. Strong engineering capabilities, global supply-chain scale and advanced NVIDIA-based infrastructure solutions strengthen Dell’s competitive positioning.
The AI infrastructure boom is also creating opportunities beyond specialized servers. Traditional servers and networking revenues jumped 122% year over year, while storage revenues increased 26%, supported by infrastructure modernization and growing data-management requirements.
Dell raised its fiscal 2027 revenue guidance to $192 billion, with AI server revenues projected to reach $74 billion, approximately three times the prior-year level. Second-quarter operating cash flow of $2.2 billion further underscores its financial strength.
However, an increasing AI-server revenue mix could pressure gross margins. Component inflation, supply constraints, elevated inventories and rapidly evolving hardware requirements also pose execution risks.
The Case for APLD
Applied Digital's aggressive AI data-center expansion presents substantial financial and operational challenges. As of Aug. 31, 2026, the company carried approximately $6.4 billion in debt against $3.7 billion in cash and restricted cash. Cash used in investing activities surged to $2.1 billion in first-quarter fiscal 2027 from $249.9 million a year earlier, reflecting heavy construction spending.
Profitability remains another concern. Despite revenues surging 322% year over year to $341.9 million, the company reported a GAAP net loss attributable to common shareholders from continuing operations of $221 million, compared with $18.5 million in the prior-year quarter. Interest expenses also jumped to $77.4 million from $8 million, highlighting the growing financing burden.
Moreover, customer concentration adds uncertainty. Three customers accounted for 88% of first-quarter revenues, including 56% from one customer. The company also faces risks associated with construction delays, power availability, permitting restrictions, equipment shortages and cost overruns. Revenue growth was partly supported by $183.5 million in tenant fit-out services, raising questions about the sustainability of the current growth rate.
Nevertheless, Applied Digital's contracted pipeline offers meaningful long-term potential. Its 1.41-GW portfolio across five campuses represents approximately $36 billion in base-term contracted revenues. Polaris Forge 1 reached 250 MW of operational capacity after quarter-end, while long-term hyperscaler leases provide revenue visibility.
Earnings Estimates Comparison for DELL and APLD
The Zacks Consensus Estimate for DELL’s fiscal 2027 EPS is pegged at $26.09 per share, reflecting expectations of robust earnings growth. The Zacks Consensus Estimate has held steady over the past 30 days but risen over the past 60 days, pointing to projected year-over-year growth of 153.3%.
Image Source: Zacks Investment Research
While DELL’s earnings estimates have improved, APLD’s estimates have moved in the opposite direction. The Zacks Consensus Estimate forecasts a fiscal 2027 loss of $2.06 per share and has been revised downward over the past 30 and 60 days, pointing to a wider loss than fiscal 2026’s 91 cents per share.
Image Source: Zacks Investment Research
DELL & APLD’s Share Performance Trajectory
Dell has decisively outperformed Applied Digital year to date, with DELL’s shares soaring 259.8% against APLD’s 22.2% decline. Dell's advantages include its established enterprise customer base, global supply chain, profitability and strong AI server demand.
DELL vs. APLD Stock’s Performance
Image Source: Zacks Investment Research
Valuation Considerations
The key difference between the two stocks lies in their valuations. DELL trades at a forward 12-month P/S ratio of 1.3, relatively cheaper than APLD’s 4.79, indicating that investors pay considerably less for each dollar of DELL’s expected sales, even though DELL has delivered substantially higher stock returns.
DELL vs. APLD: P/S F12M Ratio
Image Source: Zacks Investment Research
Conclusion: DELL Is the Better Investment Bet Now
Dell appears better positioned than Applied Digital, supported by strong AI server demand, a record order backlog, improving operating profitability and robust cash flow. Its established business model, diversified customer base and lower forward price-to-sales ratio offer a more attractive risk-reward profile. In contrast, APLD’s heavy debt burden, rising interest expenses, widening losses and customer concentration increase execution risks. Despite APLD’s long-term growth potential, DELL offers stronger financial stability and earnings visibility today.
Currently, DELL sports a Zacks Rank #1 (Strong Buy), while APLD carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.