Is Dell (DELL) The Best AI Stock to Buy on the Dip?

The AI infrastructure race is heating up, and Dell Technologies (DELL) has positioned itself as a formidable contender. With the global AI infrastructure market projected to grow at a blistering 29–31% CAGR through 2032 , investors are scrutinizing which players can capitalize on this surge. Dell's recent strategic moves—ranging from hardware innovations to ecosystem partnerships—suggest it may be one of the most compelling long-term plays in the AI space. But is it the best stock to buy on a dip? Let's dissect the evidence.

Strategic Positioning: From Edge to Enterprise

Dell's AI Factory initiative is a masterstroke in addressing the full spectrum of AI workloads. By offering end-to-end infrastructure—from edge inferencing on AI PCs to massive data center deployments—Dell is uniquely positioned to capture demand across industries. The Dell Pro Max Plus laptop, equipped with Qualcomm's AI 100 PC Inference Card, enables on-device inferencing for large language models (LLMs), a critical advantage for data scientists and engineers working at the edge . Meanwhile, PowerEdge servers with AMD Instinct MI350 GPUs deliver high-performance inferencing while reducing cooling costs by up to 60% via liquid-cooled configurations .

This dual focus on edge and enterprise scalability is rare. Competitors like NVIDIA dominate the GPU market but lack Dell's integrated approach to cooling, data platforms, and professional services. Dell's PowerCool Enclosed Rear Door Heat Exchanger (eRDHx), which captures nearly 100% of IT heat, is a game-changer for energy efficiency—a growing concern as AI workloads strain power grids .

Financials and Market Momentum

Dell's financials underscore its AI infrastructure leadership. In Q1 2025 alone, the company booked $12.1 billion in AI orders, and it raised its full-year revenue guidance to $105–109 billion . For context, in 2023, Dell reported $29.8 billion in AI infrastructure revenue in Q2 and $17.7 billion in AI orders in H1 . These figures reflect not just short-term momentum but a structural shift in enterprise demand.

The company's servers and networking segment saw a 16% YoY revenue increase in 2023, driven by AI-optimized hardware and partnerships with AMD, Intel, and Nvidia . By FY26, Dell expects to ship $20 billion in AI servers, more than double 2024's projections . This trajectory suggests Dell is not just riding the AI wave but building a moat around its infrastructure offerings.

Ecosystem and Partnerships: A Differentiator

Dell's strength lies in its ecosystem of partners, which includes Cohere, Google Gemini, and Llama-based applications. These integrations allow enterprises to deploy AI solutions tailored to their needs, whether on-premises or in hybrid environments . The Dell AI Data Platform, enhanced by Project Lightning and the Data Lakehouse, further streamlines AI workflows by ensuring high-quality data access .

This ecosystem approach contrasts with competitors who rely heavily on cloud-centric models. Dell's emphasis on on-premises and hybrid deployments aligns with enterprises prioritizing data governance and cost efficiency. For instance, its AI Factory is 62% more cost-effective for LLM inferencing on-premises compared to public cloud alternatives .

Risks and Challenges

No investment is without risks. The AI infrastructure market is capital-intensive, and Dell's reliance on energy-efficient solutions could face headwinds if supply chain disruptions persist. Additionally, while the U.S. government's CHIPS Act and National AI Research Resource initiative provide tailwinds, global grid capacity constraints could limit data center expansion .

However, Dell's focus on energy pragmatism—via innovations like the eRDHx and liquid-cooled servers—positions it to mitigate these risks better than peers. Its strong supply-chain leverage and product mix also support profitability in a highly competitive market .

Is DELL the Best AI Stock to Buy on the Dip?

Dell's strategic positioning, financial performance, and ecosystem advantages make it a standout in the AI infrastructure race. While stocks like NVIDIA and AMD dominate headlines, Dell's integrated approach to hardware, cooling, and enterprise services offers a more holistic solution for long-term growth.

If the stock dips—perhaps due to macroeconomic concerns or sector-wide volatility—this could be an opportunity to buy into a company that's not only riding the AI wave but shaping its infrastructure. However, investors should monitor execution risks, particularly in maintaining its edge against cloud-first competitors.