This Dell ISG growth story highlights how Dell Technologies Inc. (NYSE:DELL) is leveraging its deep partner ecosystem to accelerate expansion in its Infrastructure Solutions Group. In the third quarter of fiscal 2026, Dell delivered record ISG revenue of $14.1 billion, representing a robust 24% year-over-year increase. This marked the seventh consecutive quarter of double-digit growth, underscoring sustained momentum in the company’s core infrastructure business.

The growth has been driven by rising demand for Dell’s proprietary storage portfolio and its rapidly expanding AI server offerings. Customers across neocloud providers, sovereign entities, and large enterprises are increasingly turning to Dell for scalable, high-performance infrastructure solutions tailored for AI workloads.

AI Servers and Backlog Drive Momentum

A key pillar of Dell ISG growth is the company’s surging AI server business. During Q3 FY26, Dell logged $12.3 billion in AI server orders and ended the quarter with a record backlog of $18.4 billion. This backlog provides strong visibility into future revenue and highlights sustained demand for AI infrastructure.

Dell’s operational execution has further strengthened its competitive position. The company can deploy fully operational AI racks within 24 to 36 hours of delivery, a capability that resonates with customers racing to scale AI deployments. This speed and reliability have reinforced Dell’s reputation as a trusted partner for large-scale, mission-critical AI projects.

Partner Ecosystem Expands Dell’s Reach

The strength of Dell’s partner network remains central to Dell ISG growth. The company continues to expand collaborations with leading technology and infrastructure players, enhancing its ability to deliver end-to-end AI solutions.

Notable partners include NVIDIA Corporation (NASDAQ:NVDA), Microsoft Corporation (NASDAQ:MSFT), Meta Platforms, Inc. (NASDAQ:META), and AI startup Imbue. In November 2025, Dell announced a collaboration with IREN Ltd. (NASDAQ:IREN) to deploy NVIDIA-powered, liquid-cooled AI infrastructure across North America. The partnership also launched Canada’s first Dell PowerEdge XE9712 cluster powered by NVIDIA GB300 NVL72, aimed at advancing sovereign and renewable-energy-driven AI innovation.

These alliances not only expand Dell’s addressable market but also strengthen its value proposition as enterprises increasingly seek integrated hardware, software, and AI solutions.

Storage Portfolio Supports Profitability

Beyond AI servers, Dell’s storage offerings play a critical role in sustaining Dell ISG growth. Products such as PowerStore, PowerMax, and PowerFlex are gaining traction as enterprises modernize data architectures to support AI, analytics, and hybrid cloud workloads.

Dell’s emphasis on Dell-IP storage solutions supports higher margins and recurring revenue opportunities through software and services. As customers deploy more AI infrastructure, demand for high-performance, scalable storage is expected to rise, further reinforcing ISG’s growth trajectory.

Q4 Outlook Signals Continued Acceleration

Looking ahead, management expects Dell ISG growth to remain strong. For the fourth quarter of fiscal 2026, Dell projects total revenue between $31 billion and $32 billion. The midpoint of $31.5 billion implies approximately 32% year-over-year growth, reflecting confidence in order momentum and backlog conversion.

This outlook suggests that Dell’s AI-driven strategy and partner-led expansion are translating into tangible financial results. Investors will be watching closely to see how effectively Dell converts its record backlog into revenue while managing supply chains and margins.

Competitive Landscape Intensifies

Despite strong execution, Dell ISG growth faces increasing competition. Super Micro Computer, Inc. (NASDAQ:SMCI) is aggressively expanding its AI infrastructure offerings, recently announcing partnerships to deliver AI-powered retail solutions using edge AI platforms. Its focus on modular, scalable systems positions it well to capture AI spending from enterprises and retailers.

Cisco Systems, Inc. (NASDAQ:CSCO) is another formidable rival. Cisco has integrated AI across its networking, security, and collaboration products, benefiting from strong demand tied to AI infrastructure buildouts. In the first quarter of fiscal 2026, Cisco reported $1.3 billion in AI infrastructure orders from hyperscalers and expects $3 billion in AI-related revenue from hyperscalers for the full fiscal year.

These competitors underscore the intensity of the AI infrastructure market, even as overall demand continues to expand rapidly.

Stock Performance and Valuation

From a market perspective, Dell ISG growth has supported steady share price gains, though performance has lagged some benchmarks. Dell shares are up 13.9% over the past six months, trailing the Zacks Computer & Technology sector’s 15.8% return and the Zacks Computer – Micro Computers industry’s 19.3% gain.

Valuation remains a bright spot. Dell trades at a forward 12-month price-to-sales ratio of just 0.59, well below the broader technology sector average of 7.18. The stock carries a Value Score of A, suggesting it remains attractively priced relative to peers.

Earnings Outlook and Investor Takeaway

Analysts expect Dell to deliver solid earnings growth. The consensus estimate for fiscal 2026 EPS stands at $9.95, unchanged over the past month and implying 22.2% year-over-year growth.

In summary, Dell ISG growth is being fueled by strong AI server demand, rapid execution, and a powerful partner ecosystem. While competition remains intense, Dell’s scale, valuation, and backlog position it well for continued growth as AI infrastructure spending accelerates into 2026.

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