Dell Technologies (NYSE:DELL) has sharply raised its annual profit forecast after reporting a deluge of orders for AI-optimized servers, confirming its emergence as a frontrunner in the global AI infrastructure arms race. In Q1 alone, Dell locked in $12.1 billion in AI server orders and expects to ship $15 billion worth of these products this year.

This strong demand for AI infrastructure puts Dell squarely in the catbird seat of the fast past AI tech market. In contrast, HP Inc. (NYSE:HPQ) recently reported underwhelming results and issued a cautious forecast, signaling it may be missing out on the high-growth AI wave that’s reshaping enterprise IT priorities.

Why It Matters: With AI adoption accelerating across industries, the demand for high-performance computing infrastructure has reached historic highs. Dell’s strategic investments in AI-capable servers and its deep partnership with Nvidia have allowed it to quickly capitalize on this moment. Meanwhile, competitors like HP are lagging, illustrating a growing performance divide in the tech hardware race.

• Dell in the Catbird Seat as AI Infrastructure Demand Soars: Dell’s Q1 bookings of $12.1 billion in AI server orders reflect unprecedented market appetite for infrastructure capable of training and deploying AI models at scale. The company’s partnership with Nvidia and delivery of highly customizable, enterprise-grade servers position it as a dominant supplier during a foundational shift in computing demand. Dell’s leadership in this space allows it to dictate terms and pricing more favorably than peers, securing long-term revenue visibility through a $14.4 billion AI server backlog.

• HP Lags Behind with Conservative Forecast and Modest AI Gains: In contrast to Dell’s bullish performance, HP Inc. delivered mixed Q2 earnings and offered a soft full-year forecast. While HP cited some AI-related opportunities, the company has not demonstrated comparable traction in high-performance servers or large-scale infrastructure deployments. Its primary strength remains in personal systems and printing, markets that are currently sluggish. HP’s AI strategy appears nascent and insufficiently differentiated, leaving it vulnerable to market share loss as AI budgets increasingly prioritize compute power over consumer devices.

• Upgraded Guidance Reflects Dell’s Growing Confidence and Market Share: Dell increased its adjusted full-year earnings target to $9.40 per share and projected Q2 revenue of up to $29.5 billion, far exceeding analyst estimates. This reflects not only robust demand but Dell’s ability to execute large, complex infrastructure deals quickly. By dominating this new tech frontier, Dell is effectively rewriting its own valuation narrative, transitioning from a legacy PC manufacturer to an AI infrastructure powerhouse.

• AI Infrastructure Becomes the New Battleground in Enterprise IT: Enterprise clients across industries, from finance to healthcare, are rapidly investing in AI capabilities. However, what was once a software-dominated conversation has shifted to hardware: training large models and running inference at scale requires dense compute and specialized GPUs. Dell’s Infrastructure Solutions Group, which includes these critical components, grew 12% YoY, with AI server shipments forming the bulk of the growth. Competitors like HP, which lack this specialized infrastructure depth, are seeing less traction with enterprise AI buyers.

• Margins Under Pressure, but Strategic Position Offsets Risks: Dell acknowledges that high-end AI servers come with lower gross margins due to expensive components like Nvidia’s H100 GPUs and advanced cooling systems. Nevertheless, the volume and strategic value of these deals provide offsetting benefits, such as long-term customer lock-in and expansion potential. Investors seem to agree, Dell stock surged in response to its earnings, while HP shares dipped on weaker performance, reflecting diverging investor sentiment around each company’s ability to capitalize on the AI boom.

Go Deeper -> Dell Raises Annual Profit Forecast on Strong AI Server Demand – Reuters

HP Plunges After Cutting Profit Outlook on Tariffs, Economy – Bloomberg