DELL vs. CSCO: Which AI Infrastructure Stock Is the Better Buy Now?

Dell Technologies DELL and Cisco Systems CSCO are major players in the AI infrastructure market. While Dell Technologies focuses on AI-optimized servers, storage, and data center solutions, Cisco Systems specializes in high-performance networking, security, and connectivity that enable AI workloads to scale efficiently across enterprise and cloud environments.

According to International Data Corporation (IDC), spending on AI infrastructure is expected to surpass $758 billion by 2029, with 94.3% of the spending allocated to servers equipped with embedded accelerators. IDC expects momentum in AI investment to continue in 2026, driven by strong spending from hyperscalers and cloud service providers. According to Gartner, global AI spending is expected to exceed $2 trillion in 2026 compared with an estimated $1.5 trillion in 2025. Both Dell Technologies and Cisco Systems are expected to benefit from this rapid growth pace.

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

The Case for DELL Stock

Dell Technologies is benefiting from 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.

A significant contributor to this success was the surge in orders for AI servers. In the third quarter of fiscal 2026, Dell Technologies booked $12.3 billion in AI server orders, bringing year-to-date orders to $30 billion. The company shipped $5.6 billion worth of AI servers in the fiscal third quarter. In the same quarter, the company reported a record backlog of $18.4 billion in AI server orders, highlighting the sustained demand for its AI solutions. The demand for AI servers is driven by a diverse and expanding customer base, including Neoclouds, Tier 2 cloud service providers, Sovereigns and Enterprises.

Dell Technologies’ focus on AI infrastructure has positioned it as a leader in the market. The company expects to ship approximately $9.4 billion worth of AI servers in the fiscal fourth quarter of 2026. Its AI server shipments are expected to reach $25 billion for fiscal 2026, representing a remarkable 150% year-over-year growth.

The Case for CSCO Stock

Cisco Systems has been integrating AI into its product portfolios across networking, security, collaboration, and observability. Strong demand for Cisco’s products in developing AI infrastructure has been a game-changer for the company. In the first quarter of fiscal 2026, AI infrastructure orders from hyperscalers hit $1.3 billion, and Cisco expects $3 billion in AI infrastructure revenues from hyperscalers in fiscal 2026.

The company sees a growing pipeline of more than $2 billion in orders for its high-performance networking products across sovereign, Neocloud, and enterprise customers. While total Annual Recurring Revenues hit $31.4 billion, up 5% year over year, the remaining performance obligations at the end of the first quarter of fiscal 2026 were $42.9 billion, up 7% year over year.

The company’s AI infrastructure portfolio is powered by its Silicon One systems and optics, which are designed to meet the demands of high-performance AI use cases.  Silicon One chips, known for scalability, power efficiency, and programmability, are gaining traction among hyperscalers. Cisco expects to ship its 1 millionth Silicon One chip in the fiscal second quarter, further solidifying its leadership in the AI infrastructure space.

Price Performance and Valuation of DELL and CSCO

In the trailing six-month period, DELL Technologies shares have lost 3.2%, whereas Cisco Systems shares have rallied 11.7%. The outperformance in CSCO stock is driven by a strong AI push and growing security dominance.

Despite Dell Technologies’ expanding AI portfolio, the company is suffering from supply-chain constraints and competitive pressures in the PC and AI server markets.

DELL and CSCO Stock Performance

Valuation-wise, DELL shares are cheap, as suggested by a Value Score of A. Cisco Systems shares are currently overvalued, as suggested by a Value Score of D.

In terms of forward 12-month Price/Sales, DELL’s shares are trading at 0.64X, lower than Cisco Systems’ 4.82X.

DELL and CSCO Valuation

How Do Earnings Estimates Compare for DELL & CSCO?

The Zacks Consensus Estimate for DELL’s fiscal 2026 earnings is pegged at $9.95 per share, unchanged over the past 30 days. This indicates a 22.24% increase year over year.

Dell Technologies Inc. Price and Consensus

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

The Zacks’ Consensus Estimate for Cisco Systems’ fiscal 2026 earnings is pegged at $4.10 per share, unchanged over the past 30 days. This indicates a 7.61% increase year over year.

Cisco Systems, Inc. Price and Consensus

Cisco Systems, Inc. price-consensus-chart | Cisco Systems, Inc. Quote

Dell Technologies earnings beat the Zacks Consensus Estimate in all the trailing three quarters, while missing the same in once, delivering an average surprise of 0.23%. Cisco Systems’ earnings beat the Zacks Consensus Estimate in all the trailing four quarters, delivering an average surprise of 3.22%. The average surprise of Cisco Systems is higher than that of Dell Technologies.

Conclusion

While both Dell Technologies and Cisco Systems stand to benefit from the booming AI Infrastructure market, Cisco Systems offers greater upside potential with a robust AI-driven portfolio and a significantly higher earnings momentum compared to DELL.

Dell Technologies benefits from rising demand for AI-optimized servers and an expanding partner network. However, Dell Technologies is facing declining consumer PC revenue, which remains a headwind. Supply-chain costs and competitive pressures in the AI market are also impacting profitability. 

Currently, Cisco Systems carries a Zacks Rank #2 (Buy), making the stock a stronger pick than Dell Technologies, 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