Oracle vs. Dell: Which AI Stock is the Better Buy?

In the rapidly evolving world of artificial intelligence, two tech giants, Oracle and Dell, are vying for dominance. Both companies have made significant strides in integrating AI into their offerings, but which one is the better buy for investors looking to capitalize on the AI boom? Let's dive into the details and find out.

Oracle's AI Strategy: Comprehensive Integration

Oracle has been aggressively embedding generative AI capabilities across its cloud infrastructure and applications. This strategy aims to complement the traditional AI already present in Oracle's products, offering a comprehensive suite of AI-driven solutions. Rondy Ng, executive vice president of applications development at Oracle, highlights the synergy between predictive AI and generative AI, stating, "The classic AI is very good in terms of detecting patterns or predicting numbers ... but you cannot use large language models to predict numbers. So we combined the predictive numbering capability with the explained ability in words. So the two together become very powerful and you need both."

Oracle's recent announcements, such as the additional generative AI features embedded across applications in finance, supply chain, human resources, sales, marketing, and service, demonstrate its commitment to leveraging AI for business efficiency. The company's cloud infrastructure revenue shot up an impressive 51% year over year in its fiscal 2025's third quarter, indicating strong demand for its AI capabilities. Furthermore, Oracle's remaining performance obligations (RPO) jumped 63% year over year to $130 billion, suggesting a robust pipeline of future revenue from AI-driven services.



Dell's AI Strategy: Leveraging NVIDIA's Innovations

Dell, on the other hand, is focusing on leveraging NVIDIA's AI innovations to provide enterprise AI solutions. Dell Technologies, in collaboration with NVIDIA, offers a consistent experience across AI infrastructure, software, and services, providing customers with a one-stop shop to scale AI initiatives from deskside to large-scale data center deployments. Dell's expanded AI infrastructure portfolio includes new Dell Pro Max AI developer PCs and Dell PowerEdge servers that support the NVIDIA Blackwell Ultra platform, delivering systems with up to 288GB of HBM3e memory to handle complex AI models with speed and scalability.

Dell's AI Factory with NVIDIA has helped over 2,000 customers, from startups to enterprises, develop AI factories, showcasing its broad adoption and success in the market. The demand for AI servers, a key component of Dell's strategy, is expected to jump by almost 6 times between 2024 and 2030, generating an annual revenue of $838 billion by the end of the decade. Dell's infrastructure business revenue jumped an impressive 29% year over year to $43.6 billion in the recently concluded fiscal 2025, driven by the booming demand for AI servers.

Market Positions and Growth Trajectories

Both Oracle and Dell are well-positioned to capture a larger share of the AI market due to their current market positions and growth trajectories, but they are approaching the AI sector from different angles.

Oracle, traditionally known for its database management software, has seen a significant increase in demand for its cloud infrastructure, particularly for AI model training and inferencing applications. In its fiscal 2025's third quarter, Oracle's cloud infrastructure revenue shot up an impressive 51% year over year, well ahead of the 8% increase in Oracle's overall revenue. This segment now produces 19% of Oracle's top line, up by almost six percentage points from the year-ago period. Oracle's remaining performance obligations (RPO), which is the total value of a company's contracts that are yet to be fulfilled, jumped 63% year over year to $130 billion. This growth in RPO accelerated by a whopping 22 percentage points when compared to the year-ago period, indicating a strengthening demand for Oracle's cloud infrastructure. Oracle is ramping up its cloud capacity at an aggressive pace to meet this demand, with CEO Safra Catz remarking that the company expects its available power capacity to double this calendar year and triple by the end of next fiscal year. Oracle is also investing in generative AI capabilities, embedding them across applications in finance, supply chain, human resources, sales, marketing, and service. These capabilities can perform tasks such as generating financial reports and drafting job ads, improving productivity and reducing business costs. Oracle's chairman and chief technology officer Larry Ellison has also highlighted the company's advantage in monetizing the software layer of AI due to the data Oracle sits on and its installed base. Oracle's growth trajectory in the AI sector is further supported by its $500 billion Stargate Project, which is expected to drive even faster growth in the future.

Dell, on the other hand, is the largest player in the server market, with an estimated market share of 7.2% in the fourth quarter of 2024. The booming demand for AI servers has given Dell's infrastructure business a big lift, with its revenue from this segment jumping an impressive 29% year over year to $43.6 billion in the recently concluded fiscal 2025. Dell sold $10 billion worth of AI servers last year and is targeting a 50% jump in AI server revenue in the current fiscal year. Dell's growth trajectory in the AI sector is also supported by its collaboration with NVIDIA, with the Dell AI Factory with NVIDIA providing a consistent experience across AI infrastructure, software, and services. Dell's expanded AI infrastructure portfolio is engineered for right-sizing high-performance needs, with new Dell Pro Max portfolio setting the standard as the AI developer PC and new Dell PowerEdge servers driving AI acceleration for enterprises. Dell's AI growth is further supported by the expected increase in global AI spending, which is projected to hit a massive $337 billion this year and more than double by 2028 to $749 billion.



Conclusion

In conclusion, both Oracle and Dell are well-positioned to capture a larger share of the AI market in the coming years due to their current market positions and growth trajectories. Oracle's strength lies in its cloud infrastructure and generative AI capabilities, while Dell's strength lies in its server market leadership and collaboration with NVIDIA. Both companies are investing heavily in AI and are expected to benefit from the increasing demand for AI infrastructure. However, Oracle's integrated approach to generative AI across its applications and cloud infrastructure may offer a more comprehensive and seamless experience for customers, positioning it well for long-term growth.