DELL's Strong Partner Network Drives Up ISG Growth: What's Ahead?

Dell Technologies DELL is benefiting significantly from its robust partner network, which has been a key driver of growth in its Infrastructure Solutions Group (ISG). In the third quarter of fiscal 2026, ISG revenue reached a record $14.1 billion, marking a 24% year-over-year increase and seven consecutive quarters of double-digit growth. This growth is largely attributed to the company’s focus on its Dell-IP storage portfolio and AI server solutions, which have gained traction among a diverse customer base, including Neoclouds, Sovereigns, and Enterprises.

The company’s AI server business has been a significant driver of this growth, with $12.3 billion in AI server orders during the third quarter of fiscal 2026 and a record backlog of $18.4 billion.  Dell Technologies’ ability to rapidly deploy AI solutions, including operational AI racks within 24 to 36 hours of delivery, has further solidified its reputation as a reliable partner for large-scale AI infrastructure projects. 

Dell Technologies’ strong partner network will continue to play a crucial role in sustaining ISG growth. The company’s focus on Dell-IP storage solutions, such as PowerStore, PowerMax and PowerFlex, is expected to drive profitability and market share.

An expanding partner base that includes the likes of IREN, NVIDIA, Microsoft, Meta Platforms, and Imbue has been a major growth driver. In November 2025, Dell Technologies announced a collaboration with IREN to deploy NVIDIA-powered, liquid-cooled AI infrastructure across North America and launch Canada’s first Dell PowerEdge XE9712 cluster with NVIDIA GB300 NVL72 to advance sovereign, efficient, renewable-energy-driven AI innovation. 

Dell Technologies’ innovative portfolio, expanding partner base and growing AI footprint are significant growth drivers. For the fourth quarter of fiscal 2026, revenues are expected to be between $31 billion and $32 billion, with the mid-point of $31.5 billion suggesting 32% year-over-year growth.

DELL Faces Stiff Competition From CSCO and SMCI

DELL is facing stiff competition in the AI infrastructure space against the likes of Super Micro Computer SMCI and Cisco Systems CSCO.

Super Micro Computer is well-positioned to benefit from the growing demand for AI infrastructure. Super Micro Computer recently announced partnerships with top AI companies to provide scalable, AI-powered retail solutions. They are using their Edge AI infrastructure to deliver real-time insights, boost productivity, and enhance profitability for current in-store operations.

Cisco Systems has been integrating AI into its product portfolios across networking, security, collaboration, and observability. Strong demand for Cisco Systems’ 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 Systems expects $3 billion in AI infrastructure revenues from hyperscalers in fiscal 2026.

DELL’s Share Price Performance, Valuation, and Estimates

DELL’s shares have gained 13.9% in the trailing six-month period, underperforming the broader Zacks Computer & Technology sector’s return of 15.8% and the Zacks Computer - Micro Computers industry rise of 19.3%.

DELL Stock's Performance

DELL shares are cheap, with a forward 12-month Price/Sales of 0.59X compared with the Computer & Technology sector’s 7.18X. DELL has a Value Score of A.

DELL's Valuation

The Zacks Consensus Estimate for fiscal 2026 earnings is pegged at $9.95 per share, unchanged over the past 30 days. This suggests 22.24% year-over-year growth.

Dell Technologies Inc. Price and Consensus

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

DELL currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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