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New: Introducing “Why Is It Moving?” - lightning-fast, AI-driven explanations of stock moves
Dell Technologies DELL is expanding its cloud services through its infrastructure solutions and rich partner base that provides essential hardware and services that support cloud environments.
Building on this momentum, in the second quarter of fiscal 2026, Infrastructure Solutions Group (ISG) revenues, which include its cloud offerings, increased 44% year over year to $16.80 billion. The upside can be attributed to servers and networking revenues of $12.94 billion, which grew 69% year over year, with demand strength across AI and traditional servers.
A key driver of DELL’s cloud infrastructure momentum is its focus on AI-enabled cloud solutions. The company’s AI servers, which accounted for $8.2 billion in shipments in the second quarter of fiscal 2026, are designed to support large-scale cloud deployments. The AI-optimized server momentum saw a $5.6 billion increase in orders.
This momentum is further bolstered by DELL’s expanding portfolio of solutions. The company’s AI solutions, such as the NVIDIA RTX Pro 6000 AI Factory, are designed for flexibility and power efficiency, which are essential for cloud environments.
Further expanding its portfolio, in September 2025, Dell Technologies announced major private cloud infrastructure advancements, including the general availability of Dell Private Cloud, new PowerStore and PowerMax QLC models, PowerFlex Ultra, and PowerProtect innovations to improve efficiency, security and workload performance.
Dell Technologies is facing stiff competition in the growing cloud market against the likes of Microsoft MSFT and Alphabet GOOGL.
Microsoft is benefiting from strong demand for Azure cloud infrastructure expansion and AI offerings. In the fourth quarter of fiscal 2025, Microsoft Cloud revenues reached $46.7 billion, increasing 27% year over year and 25% in constant currency.
Alphabet is riding on strong cloud growth. Google Cloud is benefiting from accelerated growth across AI infrastructure, enterprise AI platform Vertex and strong adoption of Generative AI solutions. In the second quarter of 2025, Alphabet’s Google Cloud revenues surged 31.7% year over year to $13.62 billion and accounted for 14.1% of the quarter’s total revenues. Google Cloud’s annual revenue run rate is now more than $50 billion.
DELL’s shares have gained 29.9% year to date, outperforming the broader Zacks Computer & Technology sector’s return of 23.1% and the Computer - Micro Computers industry’s rise of 1.4% in the same time frame.
DELL shares are cheap, with a forward 12-month Price/Sales of 0.89X compared with the Computer & Technology sector’s 6.90X. DELL has a Value Score of B.
The consensus mark for fiscal 2026 earnings is pegged at $9.54 per share, unchanged over the past 30 days. This suggests 17.20% year-over-year growth.
Dell Technologies Inc. price-consensus-chart | Dell Technologies Inc. Quote
DELL currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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