DELL vs. SMCI: Which AI-Server Stock Should You Buy Right Now?

Core Insights - Dell Technologies (DELL) and Super Micro Computer (SMCI) are significant players in the AI-driven server market, with DELL focusing on PowerEdge servers and SMCI leading in high-performance, energy-efficient systems [1][2] Dell Technologies - DELL is experiencing strong demand for AI servers, shipping $8.2 billion in AI servers in Q2 of fiscal 2026 [3] - The company reported a $5.6 billion increase in AI server orders, with an AI backlog of $11.7 billion at the end of Q2 fiscal 2026, indicating sustained demand [4] - DELL delivered $10 billion worth of AI-optimized servers in the first half of fiscal 2026 and projects $20 billion for the entire fiscal year [5] - DELL introduced the PowerEdge XR8720t, the first single-server solution for Open RAN and Cloud RAN, enhancing performance and reducing costs for telecom and edge deployments [6] Super Micro Computer - SMCI is a frontrunner in the AI server market, quickly launching systems based on NVIDIA's latest platforms, which provides a competitive advantage [7] - The company announced new AI-optimized servers featuring NVIDIA RTX Pro and other advanced technologies at its INNOVATE! EMEA 2025 event [8] - SMCI's Data Center Building Block Solution offers comprehensive server and data center solutions, optimizing performance and reducing power consumption [9] Challenges and Valuation - SMCI faces challenges such as customer delays in transitioning to new AI platforms and reliance on NVIDIA's product cycles, which may impact its near-term performance [10][11] - Year-to-date, DELL shares have increased by 23.9%, while SMCI shares have risen by 31.9%, with SMCI's growth attributed to rising demand for AI infrastructure [12] - DELL's shares are trading at a lower forward P/E of 14.20X compared to SMCI's 19.36X, indicating a more attractive valuation for DELL [10][16] - Zacks Consensus Estimate for DELL's fiscal 2026 earnings is $9.54 per share, reflecting a 17.20% year-over-year increase, while SMCI's estimate is $2.15 per share, showing a 4.37% increase despite a 15.3% decline in estimates over the past 30 days [19][20] Conclusion - DELL's expanding portfolio and partner base position it favorably for long-term investors, while SMCI's challenges and valuation concerns may hinder its performance [21]