TradingKey - Oracle (ORCL)'s latest earnings report serves as another reminder to the market that massive capital continues to flow into AI infrastructure, and Dell (DELL) and Hewlett Packard Enterprise (HPE) may be among the beneficiaries.

Recently, Oracle reaffirmed at its earnings call that its fiscal 2027 capital expenditures will reach $90 billion to $95 billion, focusing on AI data center expansion, rack deployment, and networking equipment procurement. The key point is that Oracle Chief Financial Officer Hilary Maxson noted at the meeting that this massive spending will flow to core suppliers such as Dell and HPE.

This massive spending reflects strong potential demand for Dell and Hewlett Packard Enterprise. Investors quickly recognized the transmission logic: to keep pace with surging AI demand, Oracle still requires a vast amount of servers, networking equipment, and other data center hardware. These factors drove Dell's stock up 12% the following day, while Hewlett Packard Enterprise also became one of the best-performing index constituents that day.

What Roles Do Dell and HPE Play in the AI Server Chain?

Dell Technologies and Hewlett Packard Enterprise have become two of the most important names in enterprise infrastructure. Both companies compete fiercely across servers, storage, networking, and data center systems, with their growth strategies increasingly tied to AI-driven infrastructure and hybrid cloud.

According to a recent report from IDC, global server revenue reached $122.6 billion in the first quarter of 2026, up over 30% year-over-year, driven primarily by GPU-dense AI systems and hyperscale capital expenditure. IDC's data for the quarter ranked Dell first among named server original equipment manufacturers (OEMs) with a global revenue share of 16.5%, while Hewlett Packard Enterprise remained among the top five vendors with a 3% share.

Dell holds an advantage in AI server scale. However, Hewlett Packard Enterprise is building a more comprehensive enterprise infrastructure platform by combining ProLiant servers, storage, GreenLake hybrid cloud services, and Juniper Networking. Both companies collaborate extensively with Nvidia, integrating its accelerated computing technology into their respective AI Factory and private cloud infrastructure platforms.

In short, Dell appears to be a more direct beneficiary of AI server volume expansion and order backlogs, whereas Hewlett Packard Enterprise is assembling servers, storage, GreenLake hybrid cloud services, and Juniper Networking into a more complete enterprise infrastructure platform.

Latest Earnings: Dell and HPE Both Hit Records, But Growth Structures Differ

Dell's AI server orders and backlog surged simultaneously.

Revenue for the second quarter of fiscal 2027 reached $46.97 billion, up 58% year-over-year, exceeding market expectations of $45.34 billion. Adjusted earnings per share rose to a quarterly peak of $7.04, up 203% year-over-year and beating expectations of $4.97 by 41%.

The core driver of growth was the Infrastructure Solutions Group (ISG). Revenue for this segment grew 89% year-over-year to $31.8 billion, with AI-optimized server revenue increasing 100% to $16.4 billion and traditional server and networking sales rising 122% to $10.5 billion. The company secured a record $60.9 billion in AI server orders during the quarter, recognized $16.4 billion in AI server revenue, and ended the quarter with an AI server backlog of $95.0 billion. In the previous quarter, Dell recorded $24.4 billion in AI orders and $16.1 billion in AI server revenue.

Hewlett Packard Enterprise saw synchronized growth across its Cloud & AI, server, and networking businesses.

HPE also posted record results for the third quarter of fiscal 2026, with revenue reaching $12.21 billion, up 34% year-over-year and exceeding expectations of $12.09 billion. Adjusted earnings per share rose to a quarterly peak of $1.11, up from $0.44 in the prior-year period and beating expectations of $0.95 by nearly 17%.

Cloud & AI revenue was $9.04 billion, up 25% year-over-year, with server revenue increasing 35% to $6.77 billion. Networking revenue surged 75% to $2.9 billion, primarily driven by the consolidation of Juniper Networks, which the company acquired last year for $14 billion. The Cloud & AI operating margin expanded from 7% in the prior-year period to 17%, while free cash flow for the quarter stood at $958 million. In the previous quarter, Cloud & AI sales were $7.7 billion, with server revenue growing 33% year-over-year. CEO Antonio Neri told investors that AI is a 'multi-year growth driver,' as customer orders are growing faster than revenue while supply constraints continue to slow demand fulfillment.

Dell Wins on AI Server Scale, HPE Wins on Platform Completeness

If investors want to capture AI server demand more directly, Dell warrants higher priority for research. Its quarterly AI server orders of $60.9 billion, revenue of $16.4 billion, and backlog of $95.0 billion, combined with its AI Factory serving over 5,000 customers, indicate that it has converted the AI cloud expansion revealed by Oracle into verifiable hardware orders. The core investment thesis for Dell is assessing whether the $95.0 billion backlog and $74.0 billion outlook for AI-optimized servers can be realized according to guidance, rather than focusing solely on a single-quarter revenue jump.

If investors value portfolio capabilities in enterprise infrastructure over volume growth in standalone AI servers, Hewlett Packard Enterprise (HPE) offers greater complementarity. Beyond server growth, it benefits from networking resilience brought by Juniper, the GreenLake hybrid cloud, as well as private cloud and Vera Rubin infrastructure developed in partnership with Nvidia. The core investment thesis for HPE is assessing whether the situation where orders outpace revenue will translate into sustained growth once supply improves, or if it merely reflects short-term delivery bottlenecks.

For investors who can choose only one stock, if the priority is tracking AI server beta and order visibility, Dell should be prioritized for research; if greater emphasis is placed on platform completeness and margin expansion following the consolidation of networking, then HPE should be considered.

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