Dell Technologies (NASDAQ:DELL) is trading at a forward P/E of 14.87X, well below the Zacks Computer & Technology sector average of 29.15X, signaling strong value appeal for long-term investors. With robust demand for AI-optimized servers and an expanding partner ecosystem, the DELL stock outlook is increasingly compelling for those seeking growth at a discount.
AI-Optimized Servers Drive Revenue Growth
Dell’s AI infrastructure has become a major growth engine. In Q2 FY26, the company shipped $8.2 billion in AI servers, backed by an $11.7 billion backlog, reflecting strong market demand. With Q3 FY26 revenue guidance set at $26.5 billion to $27.5 billion, Dell anticipates 11% year-over-year growth.
The company’s AI-optimized servers, including the new PowerEdge XR8720t, support Open RAN and Cloud RAN with up to 72 cores and enhanced AI-driven capabilities. This platform enables telecom and edge deployments to achieve higher performance at lower costs, positioning Dell as a leader in AI infrastructure solutions.
Expanding Portfolio Strengthens DELL Stock Outlook
In October 2025, Dell upgraded its AI Data Platform, improving its ability to convert distributed data into actionable AI insights. The platform integrates seamlessly with NVIDIA (NASDAQ:NVDA) AI infrastructure, offering high-performance storage, data engines, and cyber protection. Features like Retrieval-Augmented Generation and enhanced inferencing capabilities enhance scalability and efficiency, reinforcing Dell’s competitiveness in AI applications.
Dell’s diverse portfolio is complemented by strong partnerships with Microsoft (NASDAQ:MSFT), Meta Platforms, Advanced Micro Devices (NASDAQ:AMD), and Imbue. Notably, a recent agreement with IREN will supply racks of NVIDIA GB300 GPUs to support Microsoft’s AI infrastructure across four Texas data centers over five years. This collaboration underscores Dell’s growing influence in enterprise AI deployments.
Strong Financial Performance Supports Value Thesis
Year-to-date, DELL stock has gained 29.5%, outperforming the broader Zacks Computer & Technology sector’s 27.2% growth. The company’s AI server momentum contributed significantly to this outperformance. With continued demand for generative AI applications, Dell is positioned to defend its market share against competitors like Super Micro Computer (NASDAQ:SMCI), which also invests heavily in AI server development.
Guidance for Q3 FY26 points to revenues between $26.5 billion and $27.5 billion, with non-GAAP earnings expected around $2.45 per share. The Zacks Consensus Estimate suggests revenue growth of 11.43% and earnings growth near 14.88% year-over-year, highlighting sustained operational strength.
Valuation and Investment Considerations
Trading at a forward P/E of 14.87X, Dell is significantly cheaper than peers such as Super Micro Computer at 16.53X and far below the sector average of 29.15X. This valuation gap makes DELL stock attractive for investors looking for growth with reasonable pricing.
The combination of AI-optimized server leadership, strategic partnerships, and innovative solutions underpins a positive DELL stock outlook. While the stock has already delivered strong gains, continued expansion in AI infrastructure and robust Q3 FY26 guidance suggest further upside potential.
Bottom Line: Buy or Hold DELL Stock
Dell Technologies (NASDAQ:DELL) offers a compelling mix of value and growth. Its leadership in AI servers, diversified client base, and innovative platform development create a strong foundation for future performance. For investors, the DELL stock outlook appears favorable, particularly for those seeking exposure to AI infrastructure growth at an attractive valuation.
As the company continues to deliver on AI initiatives and expand strategic partnerships, DELL stock could maintain momentum and reward shareholders over the coming quarters, making it a strong candidate for both buy-and-hold and long-term growth strategies.
Featured Image: Megapixl
Author Stephanie Bédard-Châteauneuf 
