What Dell Technologies (DELL)’s Expanded Role in AI Infrastructure Means For Shareholders

• Nscale recently announced an expanded multi-year agreement with Microsoft to deploy approximately 200,000 Nvidia GPUs for hyperscale AI infrastructure in the United States and Europe, with Dell Technologies collaborating as a key partner in these large-scale data center projects.
• This collaboration highlights Dell’s growing importance in enterprise AI infrastructure, showcasing both its technology partnerships and its critical role in major global AI deployments.
• We will now examine how Dell’s expanded participation in global AI infrastructure initiatives could influence its investment narrative going forward.

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Narrative Summary of Dell Technologies Investments

To be a Dell Technologies shareholder, you need to believe in the company’s ability to translate its accelerating momentum in AI infrastructure into sustainable profit growth, even as existing hardware margins come under pressure. The Nscale-Microsoft collaboration, with Dell as lead partner, affirms Dell’s relevance in the AI ​​server market, arguably the most important catalyst in the near term, but this alone cannot change the current risk that increased AI server sales will continue to dilute overall margins in the near term.

Among recent announcements, Dell reaffirmed its full-year guidance for fiscal 2026, signaling management’s confidence in near-term targets despite industry volatility. These forecasts gain credibility from Dell’s record AI order pipeline, but the gap between strong demand for high-end AI and slower operating profit improvement highlights underlying profitability headwinds that still matter for the investment case.

However, it is equally important for investors to remember that even with major new partnerships, risks remain to Dell’s ability to grow its AI margins quickly enough to offset legacy pressures, especially if…

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Dell Technologies’ outlook calls for revenue of $122.2 billion and profit of $7.4 billion by 2028. This reflects an annual revenue growth rate of 6.4% and a $2.6 billion increase in profit from the current $4.8 billion.

See how Dell Technologies forecasts give a fair value of $162.33, an increase of 9% from its current price.

Explore other perspectives

Members of the Simply Wall St community estimate Dell’s fair value between US$102 and US$192, with 23 contrasting perspectives. With expanding AI solutions generating revenue but continued pressure on margins, investor opinions really vary. Consider exploring several points of view before deciding.

Check out 23 more Dell Technologies fair value estimates – why the stock could be worth 32% less than the current price!

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to constitute financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your objectives or your financial situation. Our goal is to provide you with targeted, long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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