Dell vs. HPE: Which AI Infrastructure Stock Is the Better Buy Now?

Dell Technologies DELL and Hewlett-Packard Enterprise HPE are major players in the AI infrastructure space. While Dell has been leveraging its solid PC and enterprise server base to rapidly expand in AI-optimized infrastructure and edge computing, HPE focuses on hybrid cloud and edge computing platforms like GreenLake to support enterprise AI and data workloads.

Per IDC’s latest data, the AI infrastructure market is poised to surpass $200 billion in spending by 2028. Investments in AI servers have been a key catalyst, and with continued strong spending, both Dell and HPE are well-positioned to capitalize on this massive growth opportunity.

So, DELL or HPE — Which of these AI Infrastructure stocks has the greater upside potential? Let’s find out.

The Case for DELL Stock

Dell Technologies is benefiting in the AI Infrastructure market through strong demand for AI servers, driven by ongoing digital transformation and heightened interest in generative AI applications. Strong enterprise demand for AI-optimized servers aids DELL.

Dell Technologies’ leadership in AI-optimized servers is a key driver of growth. The company shipped $8.2 billion in AI servers in the second quarter of fiscal 2026. The AI-optimized server momentum saw a $5.6 billion increase in orders.  The company’s AI backlog of $11.7 billion exiting the second quarter of fiscal 2026 and a growing opportunity pipeline further underscore the sustained demand for its solutions. 

Dell Technologies’ expanding portfolio has been a key catalyst. The company has achieved significant growth in AI-optimized server shipments, delivering $10 billion worth of these servers in the first half of fiscal 2026 alone. The company projects $20 billion in AI server shipments for fiscal 2026, highlighting its strong momentum in the AI infrastructure space.

In September, further expanding its portfolio, Dell Technologies introduced the Dell PowerEdge XR8720t, the industry’s first single-server solution for Open RAN and Cloud RAN. It offers up to 72 cores, enhanced connectivity, and AI-driven capabilities to boost performance and lower costs for telecom and edge deployments.

The Case for Hewlett-Packard Stock

Hewlett-Packard is benefiting from robust demand for its AI-optimized servers, leading to significant revenue growth in its server segment. In the third quarter of fiscal 2025, HPE’s server segment sales increased 16% year over year and rose 21% sequentially to $4.94 billion, mainly due to strong demand for its AI servers as well as growth in server systems. 

HPE’s continuous investment in innovation is driving its success in AI infrastructure. In August 2025, the company has launched advanced servers equipped with NVIDIA RTX PRO 6000 Blackwell and NVIDIA Blackwell Ultra accelerated computing platforms, which are tailored for AI workloads.

The company also benefits from a robust demand environment for its edge-to-cloud platform, GreenLake, as customers are undergoing a major digital transformation. The GreenLake solution offers customers better visibility into resource utilization across co-located and public cloud-based workloads.

Price Performance and Valuation of DELL and HPE

Year to date, DELL Technologies and Hewlett-Packard shares have soared 30.7% and 14.3%, respectively. HPE’s underperformance is mainly due to a softened IT spending environment amid macroeconomic headwinds and rising competition, which may undermine its near-term prospects.

The outperformance in Dell technologies can be attributed to strong demand for AI servers driven by ongoing digital transformation and heightened interest in generative AI applications.

DELL and HPE Stock Performance

Valuation-wise, DELL and HPE’s shares are cheap, as suggested by a Value Score of A and a Value Score of B, respectively.

In terms of forward 12-month Price/Sales, DELL’s shares are trading at 0.90X, higher than HPE’s 0.81X.

DELL and HPE Valuation

How Do Earnings Estimates Compare for DELL & HPE?

The Zacks Consensus Estimate for DELL’s fiscal 2026 earnings is pegged at $9.54 per share, which has remained unchanged over the past 30 days. This indicates a 17.20% increase year over year.

Dell Technologies Inc. Price and Consensus

Dell Technologies Inc. price-consensus-chart | Dell Technologies Inc. Quote

However, Zacks’ Consensus Estimate for HPE’s fiscal 2025 earnings is pegged at $1.90 per share, which has remained unchanged over the past 30 days. This indicates a 4.52% decline year over year.

Hewlett-Packard Enterprise Company Price and Consensus

Hewlett Packard Enterprise Company price-consensus-chart | Hewlett Packard Enterprise Company Quote

Conclusion

While both Dell Technologies and Hewlett-Packard benefit from the rapid expansion of the AI infrastructure market, DELL’s robust portfolio and expanding partner base are key drivers that make the stock attractive for long-term investors.

Hewlett-Packard’s near-term prospects might be hurt by softening IT spending. Higher interest rates and inflationary pressures are hurting consumer spending. On the other hand, enterprises are postponing their large IT spending plans due to a weakening global economy amid ongoing macroeconomic and geopolitical issues. This does not bode well for Hewlett-Packard’s prospects in the near term.

Currently, Dell Technologies has a Zacks Rank #2 (Buy), making the stock a stronger pick than Hewlett-Packard, which has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research