Dell jumps 6% as AI server stocks rebound, widening lead over peers

Dell Technologies extended its 2026 dominance over AI server rivals, surging 6% on Monday as a broad bid returned to infrastructure names.

Dell Technologies Inc. shares rose 6% to about $419 in midday trading Monday, leading a rebound in AI infrastructure stocks after last week's selloff. The gain pushed Dell's year-to-date advance to 232%, far outpacing Hewlett Packard Enterprise Co., up 81%, and Super Micro Computer Inc., which is down 7% in 2026.

"Dell is being treated as the scale leader in AI server delivery, and the order book supports that," said Mike Santos, data center infrastructure analyst at Edgen. "The $24.4 billion in AI orders booked last quarter gives investors visibility that peers can't match."

Dell reported first-quarter fiscal 2027 revenue of $43.84 billion, up 88% from a year earlier, with AI-optimized server revenue reaching $16.13 billion — a 757% surge. Management raised its full-year revenue guidance to a range of $165 billion to $169 billion, targeting $60 billion in AI server sales. The company's gross margin compressed to 18% from 21% as the mix shifted toward lower-margin hardware, a pattern common across the AI server industry.

Dell shares trade at 31 times forward earnings, a premium to HPE at roughly 15 times and SMCI at 9 times. The valuation gap reflects Dell's scale advantage and order visibility, but also leaves the stock exposed if AI spending growth slows. The Nasdaq Composite rose 1.12% on Monday, while the S&P 500 added 0.56% and the Dow dipped 0.19%.

Dell's AI server backlog has become the central pillar of its bull case. The company booked $24.4 billion in AI orders in the fiscal first quarter alone, with its PowerEdge XE9680 and newer XE9712 platforms — supporting Nvidia's GB200 NVL72 and B300 GPUs — driving demand. The Infrastructure Rack Sobel system, available in 21-inch and 19-inch versions, provides up to 96 GPUs per rack and 786 GPUs in a scalable unit.

Hewlett Packard Enterprise has carved a different path. The stock is up 81% year to date, supported by its Juniper Networks acquisition and 148% growth in its networking segment. HPE shares rose 5% to $43.46 on Monday. The company's margin profile has held up better than Dell's, though its AI server revenue base is smaller.

Super Micro Computer remains the cautionary tale. The stock is flat at $27.19 on the session and down 7% year to date, weighed down by an independent board review of export-control matters and a third-quarter revenue miss of 18%. Its forward P/E of 9 times reflects the governance overhang, making it the cheapest of the three by that measure.

The broader AI infrastructure trade showed signs of stabilizing Monday after a turbulent June. Semiconductor ETF flows turned sharply positive in Thursday's session, with the Direxion Daily Semiconductor Bear 3X Shares jumping 17% on heavy volume as traders repositioned into hardware exposure. Memory and AI-related chip stocks also climbed, with Micron Technology and Seagate Technology among the gainers.

The divergence among Dell, HPE, and SMCI shows what the market is rewarding in AI infrastructure: scale and order visibility over valuation. Dell's 31 times forward earnings leaves little room for execution missteps, but its $60 billion AI server target and $24.4 billion quarterly order book provide a revenue cushion that peers have yet to match. HPE offers a cleaner margin story at a lower multiple, while SMCI remains a turnaround play contingent on resolving its governance issues.

This article is for informational purposes only and does not constitute investment advice.