Nvidia(NASDAQ: NVDA) again Micron technology(NASDAQ: MU) have been at the center of artificial intelligence (AI) infrastructure in recent years, as they design and manufacture key chips that help run AI systems.
Not surprisingly, shares of both companies have delivered stellar gains. Nvidia stock is up 492% over the past three years. Micron, on the other hand, jumped by an impressive 1,420% during the same period. The good part is that both companies can continue to deliver healthy profits, mainly due to heavy investments in AI data centers.
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Nvidia has a huge revenue backlog of more than $1 trillion for 2026 and 2027 for its Blackwell and Vera Rubin graphics processing units (GPUs). In addition, the semiconductor giant is making great progress in new areas such as server processors and physical AI, which should ensure its red-hot growth continues over time.
Meanwhile, Micron’s memory chips are helping AI accelerators designed by Nvidia and other chip makers to work at their full potential. As a result, Micron has been plagued by strong memory demand, leading to hotter revenue and earnings growth. However, I believe another stock has the potential to outperform Nvidia and Micron, given their key role in the AI infrastructure — Dell Technologies(NYSE: DELL).
Let’s take a look at the reasons why this tech giant could be the big winner of the AI data center boom this year.
Image source: The Motley Fool.
Dell Technologies’ latest results mark its arrival in the AI infrastructure space
Dell released financial results for the first quarter of 2027 (for the three months ended May 1) on May 28. The stock rose 33% the next day. Dell’s revenue rose 88% year over year to a record $43.8 billion, well above the consensus estimate of $35.5 billion.
Its non-GAAP earnings also rose to $4.86 per share, up 214% from the year-ago period. Analysts would have paid just $2.99 in earnings per share. It’s worth noting that Dell’s revenue and earnings outpaced Nvidia’s growth last quarter. The AI giant reported an 85% year-over-year increase in revenue and a 140% jump in earnings in the first quarter of fiscal 2027 (ended April 26).
The growing demand for AI-optimized servers has fueled Dell’s impressive performance. The company has been designing and manufacturing AI server industries for many partners, including Nvidia, Google Cloud, SpaceX, OpenAI, Palantir Technologies, CrowdStrikeand others. Dell noted in its recent earnings call that it now builds AI servers for more than 5,000 customers, including private customers, neocloud providers, and enterprises. Its AI customer base has increased by more than 50% in just six months.
This explains why Dell is seeing dramatic growth in AI server orders. Specifically, Dell booked $24.4 billion in new AI server orders last quarter, while shipping $16.6 billion worth of AI servers. Thus, Dell received more orders than it filled. This explains why the company ended the quarter with a massive AI backlog of $51.3 billion.
Dell executives note that demand for server AI has outstripped supply. As a result, it expects to end the year with a “reasonable backlog,” suggesting that the current impressive growth will remain. Importantly, Dell significantly increased its 2027 revenue guidance to $167 billion, up from the previous estimate of $140 billion.
The company expects $60 billion in server AI revenue this year, far higher than the $25 billion it generated in fiscal 2026. What is important to note is that the AI server market is expected to open at an annual growth rate of 35% between 2026 and 2034, according to Fortune Business Insights. It is expected to generate up to $2.85 trillion in revenue by the end of the forecast period, compared to $262 billion this year.
Dell is clearly growing faster than the end market, which means it’s getting a bigger share of this lucrative space. This should pave the way for spectacular long-term growth for Dell, which is why investors should consider buying this AI stock before it moves higher.
The stock is cheap right now, and that’s setting it up for some serious gains
Dell trades at just 2.3 times sales. That is less than Nasdaq Composite index multiplication of 5.6. In addition, Dell is much cheaper than both Micron and Nvidia.
Data via YCharts
With Dell forecasting an impressive 47% jump in revenue this year, it should trade at a premium to the Nasdaq Composite. But even if it trades on average multiples of the index’s sales at the end of the current fiscal year, its market cap could rise to $935 billion. That’s more than 3x ts current market cap, suggesting it’s not too late for investors to buy into this potential multibagger.
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Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CrowdStrike, Micron Technology, Nvidia, and Palantir Technologies. The Motley Fool has a policy of disclosure.
Not Nvidia. Not the Micron. This Underrated Infrastructure (AI) Stock Will Be the Biggest Winner in 2026 was originally published by The Motley Fool.
