Dell vs. APLD: Which AI Infrastructure Stock Wins in 2025?
Explore the 2025 AI infrastructure showdown between Dell Technologies and Applied Digital (APLD). Discover valuation gaps, growth drivers, and which stock suits your investment appetite in this booming sector.
Key Takeaways
- Dell shipped $8.2B in AI servers in Q2 2026 and raised full-year guidance to $20B.
- APLD secured a $7B lease deal for its Polaris Forge 1 AI data center campus.
- Dell trades at a bargain 0.76X forward sales versus APLD’s expensive 14.46X ratio.
- Dell offers a diversified AI portfolio with strong enterprise partnerships.
- APLD focuses on high-growth, specialized AI data centers but operates at a loss.
- Dell holds a Zacks Rank #2 (Buy); APLD is ranked #3 (Hold).
The AI infrastructure market is booming, projected to grow from $87.6 billion in 2025 to nearly $198 billion by 2030. Two heavyweights, Dell Technologies and Applied Digital (APLD), are racing to capture this explosive demand. Dell leans on its broad AI-optimized server lineup and enterprise IT solutions, while APLD bets big on hyperscale AI data centers.
Dell’s recent $8.2 billion AI server shipments in Q2 2026 and a raised $20 billion full-year target highlight its strong foothold. Meanwhile, APLD’s $7 billion lease deal for Polaris Forge 1 signals aggressive expansion in AI data center capacity. Yet, their valuations couldn’t be more different — Dell trades at a modest 0.76X forward sales, while APLD commands a sky-high 14.46X.
This article dives into the nitty-gritty of these two AI infrastructure stocks, unpacking their strengths, risks, and what investors should consider before jumping on the AI bandwagon.
Dell’s AI Server Dominance
Dell Technologies is flexing serious muscle in AI infrastructure. In Q2 of fiscal 2026 alone, Dell shipped $8.2 billion worth of AI-optimized servers — a number that’s not just impressive but a clear signal of strong enterprise demand. The company even raised its full-year AI server shipment guidance from $15 billion to $20 billion, underscoring sustained momentum.
Think of Dell as the reliable workhorse powering AI’s backbone. Its AI backlog of $11.7 billion exiting Q2 shows a robust pipeline, while a $5.6 billion increase in AI server orders during the quarter highlights growing trust from customers. This isn’t a flash in the pan; it’s a steady march fueled by digital transformation and generative AI’s rising popularity.
Dell’s partnerships with giants like Nvidia, AMD, and Meta add fuel to this fire. Their NVIDIA RTX Pro 6000 AI Factory solutions help enterprises manage AI at scale, making Dell a one-stop shop for AI infrastructure. For investors, this mix of scale, innovation, and ecosystem strength paints a picture of a company well-positioned to ride the AI wave without losing its footing.
APLD’s Hyperscale AI Bet
Applied Digital (APLD) is playing a different game — one focused on hyperscale AI data centers designed for high-performance computing. Their Polaris Forge 1 campus in North Dakota is a $7 billion lease deal with CoreWeave, a major AI hyperscaler, locking in revenues over 15 years. This campus will deliver 250 megawatts of critical IT load, with phased facility openings from late 2025 through 2027.
But APLD isn’t stopping there. In August 2025, they announced Polaris Forge 2, a $3 billion, 280MW AI Factory near Harwood, ND, expected to reach full capacity by early 2027. This expansion will create over 200 jobs and leverage North Dakota’s abundant energy and business-friendly environment.
APLD’s strategy is clear: build massive, specialized AI data centers to meet skyrocketing demand for GPU compute power. This niche focus offers high growth potential but comes with risks — including heavy capital expenditure, customer concentration, and current operating losses. For investors chasing explosive AI infrastructure growth, APLD is a bold, if bumpy, ride.
Valuation and Market Sentiment
Here’s where the story gets intriguing. Dell’s shares trade at a modest 0.76X forward sales, signaling a bargain compared to APLD’s eye-watering 14.46X. This valuation gap reflects market confidence in Dell’s diversified revenue streams and profitability, versus APLD’s high-growth but loss-making profile.
Year to date, Dell’s stock has appreciated 8%, a respectable gain given its size and market position. APLD, on the other hand, has soared 122.2%, fueled by excitement around AI data center demand and long-term lease contracts. But high growth often comes with high risk — APLD’s Value Score of F and ongoing losses highlight this.
Dell’s Zacks Rank #2 (Buy) contrasts with APLD’s #3 (Hold), reinforcing the idea that Dell is the safer pick. Investors should weigh whether they want to pay a premium for APLD’s growth story or opt for Dell’s steady, enterprise-backed approach.
Financial Health and Earnings Outlook
Dell’s financials tell a story of cautious optimism. The Zacks Consensus Estimate for fiscal 2026 earnings per share is $9.54, marking a 17.2% year-over-year increase. This uptick reflects Dell’s ability to capitalize on AI demand while managing legacy business headwinds like weaker traditional server sales and consumer PC declines.
APLD’s earnings paint a different picture. The consensus estimate for 2025 shows a loss of 34 cents per share, though this is an improvement from a loss of 80 cents per share a year earlier. While losses persist, the company’s long-term lease deals and expansion plans suggest a path toward profitability, albeit with uncertainty.
Investors should note that Dell’s diversified business model and positive earnings trajectory offer a cushion against market volatility. APLD’s growth-stage status means it’s still navigating the tricky transition from expansion to profit, a journey that demands patience and risk tolerance.
Choosing Between Dell and APLD
So, which AI infrastructure stock fits your portfolio? Dell Technologies offers a comprehensive, enterprise-focused AI infrastructure solution with a proven track record and reasonable valuation. Its partnerships and broad product range make it a dependable choice for investors seeking steady growth and lower risk.
Applied Digital, meanwhile, is the high-octane contender, betting on hyperscale AI data centers and rapid expansion. Its potential for outsized returns is balanced by elevated risk, including customer concentration and ongoing losses. This makes APLD suitable for investors with a higher risk appetite and belief in sustained AI compute demand.
Ultimately, the decision hinges on your investment style. If you crave stability and diversification, Dell is the safer harbor. If you’re chasing the AI gold rush and can stomach volatility, APLD offers a thrilling, if uncertain, ride. Either way, the AI infrastructure market’s growth promises exciting opportunities ahead.
Long Story Short
Dell Technologies stands out as the more stable, diversified AI infrastructure play in 2025. Its strong AI server shipments, expanding partner ecosystem, and reasonable valuation make it a compelling choice for investors seeking steady growth in the AI boom. The company’s ability to serve a broad enterprise base and innovate across the AI lifecycle adds layers of resilience. Applied Digital’s rapid expansion and niche focus on hyperscale AI data centers offer tantalizing upside but come with higher risk. Its lofty valuation and ongoing losses suggest caution for those wary of volatility and concentrated customer exposure. The $7 billion Polaris Forge lease deal and new campus plans underscore growth potential, but profitability remains a question mark. For investors, the choice boils down to risk appetite: Dell offers a safer, comprehensive AI infrastructure investment, while APLD is a high-risk, high-reward specialist. Understanding these nuances can help you steer your portfolio through the AI infrastructure gold rush with confidence and clarity.