How Dell Technologies Is Capitalizing on the AI Infrastructure Boom

Dell Technologies (DELL) has emerged as a major beneficiary of the explosive growth in AI infrastructure demand. In fiscal Q3 2026, the company’s Infrastructure Solution Group posted revenues of $14.10 billion, reflecting a robust 24% year-over-year increase and marking the seventh consecutive quarter of double-digit expansion. The primary engine behind this performance has been unprecedented demand for AI servers.

Record-Breaking AI Server Orders and Backlog

The numbers paint a striking picture of market momentum. Dell Technologies secured $12.3 billion in AI server orders during fiscal Q3 2026, with year-to-date bookings reaching $30 billion. Physical shipments during the same quarter totaled $5.6 billion in AI server revenue. Perhaps most tellingly, the company ended the quarter with a record backlog of $18.4 billion in unfulfilled AI server orders, signaling robust demand visibility extending well into future quarters.

Looking ahead, Dell projects AI server shipments of approximately $9.4 billion for fiscal Q4 2026. For the full fiscal year 2026, the company anticipates AI server shipments will reach $25 billion—an extraordinary 150% surge compared to the prior year. This growth is being driven by a heterogeneous customer base spanning hyperscale cloud operators, mid-tier cloud providers, sovereign entities, and large enterprises.

In November 2025, Dell announced a strategic partnership with IREN to deploy NVIDIA-powered, liquid-cooled AI infrastructure across North America, further solidifying its position in the rapidly evolving market.

Navigating Intensifying Market Competition

Dell’s commanding position is being tested by formidable competitors. Hewlett-Packard Enterprise (HPE) and Super Micro Computer (SMCI) are both aggressively expanding their AI infrastructure footprint. HPE recently partnered with NVIDIA to establish the AI Factory Lab in Grenoble, France, targeting EU customers seeking greater sovereignty and autonomy over their AI systems and data governance.

Super Micro Computer has fortified its competitive standing by expanding its NVIDIA Blackwell product line with new 4U and 2-OU liquid-cooled configurations featuring NVIDIA HGX B300 architecture. These systems deliver up to 144 GPUs per rack and 2.1TB of HBM3e memory, enabling superior performance and efficiency metrics for hyperscale deployments.

Valuation and Market Performance Assessment

Dell’s stock has appreciated 3.6% over the trailing six months—a notably lackluster showing relative to the broader Computer & Technology sector’s 20.4% gain and the Computer-Micro Computers industry segment’s 35% advance.

From a valuation perspective, DELL offers compelling value. The stock trades at a forward 12-month Price/Sales multiple of 0.69X, significantly discounted compared to the sector median of 6.62X. The company carries a Value Score rating of A, indicating deep relative undervaluation.

The Zacks Consensus Estimate projects fiscal 2026 earnings per share of $9.89, representing 21.50% year-over-year growth. This consensus estimate has strengthened by 3.56% over the past month, reflecting improving analyst sentiment. DELL currently carries a Zacks Rank rating of #3 (Hold).