Group 1: Company Performance - Dell Technologies is experiencing accelerated growth in its Infrastructure Solutions Group (ISG), achieving record revenues of $16.8 billion in Q2 of fiscal 2026, representing a 44% year-over-year increase and six consecutive quarters of double-digit growth [1][10] - The company shipped $8.2 billion in AI servers during the same quarter and raised its full-year AI server shipment guidance from $15 billion to $20 billion, indicating sustained demand for AI-driven solutions [2][10] - Dell's shares have gained 10.1% year to date, underperforming the broader Zacks Computer & Technology sector's return of 18.8%, but outperforming the Computer - Micro Computers industry, which has declined 6.1% [8] Group 2: Strategic Developments - Dell Technologies is enhancing its AI infrastructure through the Dell AI Factory in collaboration with NVIDIA, introducing improved data management, software, and managed services to accelerate enterprise AI adoption [3][4] - The company is expanding its partner base, including collaborations with Nvidia, AMD, and Meta, which strengthens its ecosystem and positions it to capture a significant share of the projected $350 billion AI infrastructure market by 2028 [4] Group 3: Competitive Landscape - Dell Technologies faces stiff competition from companies like Applied Materials and Cisco Systems, both of which are also expanding their presence in the AI infrastructure space [5] - Applied Materials has signed transformative 15-year lease agreements with CoreWeave to deliver 250 megawatts of critical IT load, expected to generate approximately $7 billion in contracted revenues [6] - Cisco Systems has integrated AI into its product portfolios and received AI infrastructure orders exceeding $2 billion from web-scale customers in fiscal 2025 [7] Group 4: Valuation and Earnings Estimates - Dell's forward 12-month Price/Sales ratio is 0.77X, significantly lower than the Computer & Technology sector's 6.91X, indicating that Dell shares are considered cheap [11] - The consensus estimate for Dell's fiscal 2026 earnings is $9.54 per share, reflecting a 17.20% year-over-year growth, with a slight increase of 0.95% in the past 30 days [13]

Core Insights - The AI infrastructure market is projected to grow from $87.6 billion in 2025 to $197.64 billion by 2030, with a CAGR of 17.71% [2] - Dell Technologies (DELL) and Applied Digital (APLD) are key players in this market, with DELL focusing on AI-optimized servers and enterprise IT solutions, while APLD specializes in high-performance computing and AI data centers [1] Dell Technologies (DELL) - DELL is experiencing strong demand for AI servers due to ongoing digital transformation and interest in generative AI applications [3] - In Q2 of fiscal 2026, DELL shipped $8.2 billion in AI servers and raised its full-year shipment guidance from $15 billion to $20 billion, indicating sustained demand [4] - DELL's AI backlog reached $11.7 billion at the end of Q2 fiscal 2026, with a $5.6 billion increase in orders during the same period [5] - The company has an expanding partner base, including Nvidia, AMD, and Meta, enhancing its ecosystem and interest in its AI solutions [6] - DELL's shares are trading at a low valuation of 0.76X forward sales, suggesting a potential investment opportunity [11][15] Applied Digital (APLD) - APLD signed a 15-year lease agreement with CoreWeave to deliver 250 megawatts of IT load at its Polaris Forge 1 campus, expected to generate approximately $7 billion in contracted revenues [7] - The Polaris Forge 1 facility is designed for AI and high-performance computing, with plans for additional facilities to scale up to 1 gigawatt [8] - APLD is also expanding with the construction of Polaris Forge 2, a $3 billion, 280MW AI Factory, expected to create over 200 jobs [9] - APLD shares have appreciated 122.2% year-to-date, driven by demand for AI infrastructure, but the stock is currently considered overvalued at 14.46X forward sales [10][15] Financial Performance and Valuation - DELL's fiscal 2026 earnings estimate is $9.54 per share, reflecting a 17.20% year-over-year increase [17] - APLD reported a loss of 80 cents per share in the previous year, indicating ongoing challenges in achieving profitability [17] - DELL holds a Zacks Rank 2 (Buy), while APLD has a Zacks Rank 3 (Hold), suggesting a stronger investment case for DELL [19]