Dell Technologies DELL and Apple AAPL are encountering AI at different levels, with DELL focusing on enterprise AI infrastructure and hardware stack, while the latter is heavily focused on on-device AI. Both Dell and Apple are pushing for AI PCs by embedding AI capabilities directly on the device. They are focused on developing better battery life, optimized chips, and thermal efficiency, which are necessities for AI workloads to compute efficiently. Both are also benefiting from a strong partner base.
So, Dell Technologies or Apple, which is a better buy under the current scenario?
The Case for Dell Technologies
DELL is benefiting from strong AI infrastructure demand that is driving its top-line growth. The company is benefiting from accelerating AI infrastructure demand. In fiscal 2026, the company recorded more than $64 billion in AI-optimized server orders and shipped above $25 billion worth of AI infrastructure, ending the year with a record backlog of $43 billion. DELL’s AI infrastructure solutions are gaining traction among enterprises, sovereign entities and next-generation cloud providers, with the company serving more than 4,000 AI customers globally.
DELL’s ability to optimize AI systems for performance, deliver rapid deployment at scale and provide lifecycle services has strengthened its competitive position. The company’s integrated rack-scale systems and data center solutions allow customers to deploy AI clusters efficiently, while managing the total cost of ownership. These capabilities are helping Dell Technologies capture opportunities as organizations scale AI workloads across industries. This is expected to drive top-line growth with AI server revenues to reach $50 billion in fiscal 2027, representing more than 100% year-over-year growth.
Dell Technologies’ prospects benefit from strong liquidity. In fiscal 2026, the company generated more than $11 billion in operating cash flow and ended fiscal 2026 with $13.3 billion in cash and investments. This healthy cash position allows Dell Technologies to continue investing in strategic areas like AI infrastructure and data center modernization. Apart from supporting business expansion, the company’s strong cash generation enables consistent shareholder returns. In fiscal 2026, the company returned $7.5 billion to shareholders through dividends and share repurchases, including $2.2 billion in the fiscal fourth quarter. DELL also raised its dividend 20% and increased its share repurchase authorization by $10 billion, reflecting confidence in its long-term growth prospects.
The Case for Apple
Strong iPhone 17 sales are expected to help Apple’s top-line grow in fiscal 2026. The company has been adding features to the iPhone line-up, including Apple Intelligence tools as well as Apple Creator Studio, which is driving iPhone sales. The company has introduced dozens of features, including writing tools and cleanup and made it available in 15 languages. Visual intelligence is helping users learn and do more with their content on iPhone. It is helping users search faster, take action and answer questions across their apps. Apple’s multi-year collaboration deal with Google is now expected to be a key catalyst in boosting Apple Intelligence features.
Apple is expanding its MacBook portfolio with the launch of MacBook Air and MacBook Pro. The devices come at an opportune time as the iPhone maker faces stiff competition from the likes of Lenovo, HP and Dell Technologies. The introduction of M5 Pro and M5 Max chips, built using a new Apple-designed Fusion Architecture, which connects two dies into a single SoC, boosts performance. The new MacBook Air is powered by the latest M5, which features a faster CPU and next-generation GPU with a Neural Accelerator in each core. The 14-inch and 16-inch MacBook Pro, powered by M5 Pro and M5 Max, adds superior performance and AI capabilities.
Apple’s Services segment benefits from an expanding games portfolio and the growing popularity of Apple TV+. Apple’s strategy of adding new games on a continuous basis is driving its user base. The Services have been benefiting from frequent updates, thereby driving the user base. New features helped Apple Pay make a significant impact by eliminating well over $1 billion in fraud, while generating more than $100 billion in incremental merchant sales globally. Apple Pay is now available in 89 markets, while Apple Fitness+ has expanded to 28 additional countries and regions.
DELL’s & AAPL’s Earnings Estimate Revision Positive
The Zacks Consensus Estimate for DELL’s fiscal 2027 earnings is pegged at $12.83 per share, up 0.9% over the past 30 days, indicating a 24.6% increase over fiscal 2026’s reported figure.
Dell Technologies Inc. Price and Consensus
Dell Technologies Inc. price-consensus-chart | Dell Technologies Inc. Quote
The consensus mark for AAPL’s fiscal 2026 earnings has increased 0.7% to $8.50 per share over the past 30 days, suggesting 13.9% growth over fiscal 2025.
Apple Inc. Price and Consensus
Apple Inc. price-consensus-chart | Apple Inc. Quote
Stock Price Performance and Valuation
Dell Technologies shares have returned 68.7% year to date, outperforming Apple’s decline of 2.1%.
Price Performance: DELL vs. AAPL
Image Source: Zacks Investment Research
Valuation-wise, Dell Technologies shares are cheaper compared with Apple. In terms of forward 12-month Price/Sales, DELL shares are trading at 0.97X, lower than AAPL’s 8.09X.
While DELL has a Value Score of C, Apple has a Value Score of F.
DELL and AAPL Valuation
Image Source: Zacks Investment Research
Conclusion
Apple remains a strong long-term investment driven by ecosystem strength, consumer AI adoption and services growth, but its AI monetization is more gradual and indirect. However, Dell appears to be the better buy for investors seeking direct exposure to the rapid growth in enterprise AI infrastructure and data center spending.
Dell Technologies currently has a Zacks Rank #1 (Strong Buy), which implies that the stock is a better buy compared with Apple, which currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Beyond Nvidia: AI’s Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren’t likely to keep delivering the biggest profits. Little-known AI firms tackling the world’s biggest problems may be more lucrative in the coming months and years.
Apple Inc. (AAPL) : Free Stock Analysis Report
Dell Technologies Inc. (DELL) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
