Dell Technologies vs. Apple: Which AI Stock is a Better Buy?

Dell Technologies DELL and Apple AAPL operate in the technology hardware market but have very different business models. Dell derives revenues primarily from enterprise infrastructure (servers, storage and networking products), PCs and IT services, while Apple generates most of its revenues from premium consumer devices such as the iPhone, Mac, iPad, Apple Watch and AirPods, complemented by its fast-growing Services segment. 

Both companies are investing heavily in AI, but their approaches differ. Dell is benefiting from the AI infrastructure boom by supplying AI-optimized servers, storage and networking equipment powered by NVIDIA and AMD processors. Apple is integrating Apple Intelligence across its ecosystem, focusing on on-device AI, privacy and enhanced user experiences across iPhone, iPad and Mac.

So, Dell Technologies or Apple, which is a better buy under the current scenario?

The Case for Dell Technologies

Dell’s growth is increasingly tied to enterprise spending on AI infrastructure, accelerating demand for AI servers, storage modernization and hybrid cloud deployments. Large enterprise customers and hyperscale cloud providers remain key contributors to Dell’s revenue growth. In the first quarter of fiscal 2027, AI server orders reached $24.4 billion, AI server revenues surged 757% year over year to $16.1 billion, and AI server backlog expanded to $51.3 billion. The company expects $60 billion in AI server revenues for fiscal 2027, nearly 2.4 times last year’s reported level.

Dell is positioning itself as a leading AI infrastructure provider by expanding its portfolio of AI-optimized servers, storage, networking and services. The company has strengthened partnerships with NVIDIA, AMD, Intel and other semiconductor vendors to deliver end-to-end AI solutions for enterprises and hyperscale cloud providers. Through the Dell AI Factory, integrated AI software stack and liquid-cooled PowerEdge servers, Dell is helping customers deploy, train and run generative AI models more efficiently. Rising demand for AI infrastructure has significantly boosted Dell's Infrastructure Solutions Group, making AI one of its most important long-term growth drivers.

Growth is not limited to AI. Dell’s traditional server business grew 92% year over year in the first quarter of fiscal 2027, supported by enterprise data center modernization and replacement of aging installed infrastructure. DELL highlighted broad-based demand across every geography, while storage revenues increased 8%, marking the fifth consecutive quarter of above-market Dell-IP storage growth. These trends lifted Infrastructure Solutions Group revenues 181% year over year and operating income 206%, demonstrating that both AI and traditional infrastructure are contributing to earnings growth.

The Case for Apple

Apple is increasingly positioning its devices as the best platform for on-device AI. Apple Intelligence is deeply integrated across iPhone, Mac and AirPods, while newer Apple Silicon chips provide meaningful AI performance gains. The company also noted growing enterprise adoption of Macs for AI development, with Mac Mini, Mac Studio and MacBook Neo experiencing demand well above expectations because of AI workloads.

Apple’s new version of Siri AI, announced at this year’s annual Worldwide Developers Conference, is designed to be more conversational, context-aware and capable across the company’s devices. The update introduces enhanced reasoning, personalized assistance, visual intelligence, writing tools and deeper integration with apps and system functions.

Apple’s Services segment benefits from an expanding games portfolio and the growing popularity of Apple TV+. In the second quarter of fiscal 2026, Services contributed 27.9% of total net sales, with revenues rising 16.3% year over year to $30.98 billion, which was a record in Apple’s history. Apple continues to benefit from its installed base of more than 2.5 billion active devices, supporting higher paid accounts, transaction volumes and recurring revenues. This expanding ecosystem provides investors with greater earnings visibility and margin stability.

DELL’s & AAPL’s Earnings Estimate Revision Positive

The Zacks Consensus Estimate for DELL’s fiscal 2027 earnings is pegged at $18.80 per share, up 3 cents over the past 30 days, indicating an 82.52% increase over fiscal 2026’s reported figure.

The consensus mark for AAPL’s fiscal 2026 earnings has increased by a penny to $8.76 per share over the past 30 days, suggesting 17.43% growth over fiscal 2025.

Stock Price Performance and Valuation

Dell Technologies shares have returned 238.3% year to date, outperforming Apple’s appreciation of 23.9%.

Price Performance: DELL vs. AAPL

Image Source: Zacks Investment Research

Valuation-wise, shares of both Dell Technologies and Apple are overvalued. In terms of forward 12-month price/sales, DELL shares are trading at 1.53X, lower than AAPL’s 9.67X.

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

Both Dell and Apple are well positioned to benefit from the expanding AI opportunity. Dell offers stronger near-term growth potential, driven by surging demand for AI infrastructure, a rapidly expanding AI server backlog and an attractive valuation relative to Apple. The iPhone-maker, meanwhile, continues to benefit from its unmatched ecosystem, growing Services business and long-term AI strategy centered on on-device intelligence and user privacy. While both stocks have favorable earnings estimate revisions, Dell appears to offer greater upside for growth-oriented investors at current levels, making it the more compelling choice under the present market environment.

Dell Technologies currently sports 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.

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

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