While the U.S. rebuilds its physical infrastructure, an even more critical, often overlooked, digital infrastructure boom is underway, fueled by artificial intelligence. Dell Technologies is silently dominating this crucial sector, supplying the essential hardware for the world’s exploding AI and data center needs. With impressive revenue growth, a record backlog, and an attractive valuation, Dell presents a compelling multibagger opportunity that long-term investors should not miss.
The concept of “infrastructure stocks” traditionally conjures images of heavy civil construction, roads, bridges, and power grids. Indeed, the bipartisan Infrastructure Investments & Jobs Act in the U.S. is channeling billions into these vital projects, creating a significant tailwind for companies like United Rentals, Eaton, and Sterling Infrastructure, which have historically benefited from such initiatives. Yet, as the world advances, a new form of infrastructure has become equally, if not more, critical: the digital backbone powering artificial intelligence.
This digital infrastructure – composed of vast data centers, powerful servers, and advanced networking equipment – is experiencing an unprecedented surge in demand. Companies and governments worldwide are racing to develop, train, and deploy AI models, recognizing its immense potential to boost productivity and drive innovation. This shift presents an incredible, often overlooked, opportunity for investors.
The New Foundation: AI Driving Unprecedented Growth in Digital Infrastructure
The economic impact of AI is profound and rapidly expanding. According to analysis from PwC, industries with higher exposure to AI are already seeing a three-fold increase in revenue per employee compared to those with minimal AI integration. This staggering productivity gain is compelling organizations to invest heavily in AI capabilities.
The scale of this investment is immense. Research from McKinsey suggests that a colossal $6.7 trillion is expected to be poured into data centers through 2030, with a dominant three-quarters of that capital specifically earmarked for AI-capable data centers. This massive financial commitment underscores the critical role that robust, scalable AI infrastructure will play in the coming decade.
Dell Technologies: An Unseen Powerhouse in the AI Revolution
While many associate Dell Technologies (NYSE: DELL) primarily with personal computers, its true long-term investment potential lies in its integral role in the AI infrastructure boom. Dell’s Infrastructure Solutions Group (ISG) segment is a quiet giant, delivering the essential storage, server, and networking equipment that forms the very foundation of modern data centers.
The numbers speak for themselves. In the first six months of fiscal year 2026 (ended August 1), Dell’s ISG revenue impressively surged by 30% year over year, reaching $27.1 billion. A substantial 71% of this revenue came from sales of servers and networking equipment, which saw a remarkable 47% increase from the prior year. This growth trajectory is not only strong but accelerating.
Dell’s management is highly confident in this momentum, projecting over $20 billion in AI server sales for the current fiscal year—more than double the revenue from this segment last year. This optimism is backed by a robust AI server order backlog of $11.7 billion, demonstrating consistent demand and long-term visibility for this critical business line.
Strategic Alliances Driving Future Growth
Dell’s strategic partnerships further solidify its position in the AI ecosystem. The company is actively shipping server racks equipped with Nvidia’s cutting-edge AI chip systems to major players like CoreWeave. CoreWeave, a specialized cloud provider for AI workloads, has rapidly expanded its revenue backlog, securing multi-billion dollar contracts from industry titans such as OpenAI, Meta Platforms, and Nvidia itself.
CoreWeave’s backlog, which has soared past the $50 billion mark, indicates a tremendous need for additional AI computing capacity. As CoreWeave and other cloud providers continue to invest heavily in expanding their infrastructure, Dell stands to be a primary beneficiary, supplying the hardware that underpins these ambitious growth plans.
Looking at the broader market, sales of servers incorporating AI accelerators are forecasted to skyrocket from $144 billion last year to an astounding $427 billion next year, representing a compound annual growth rate of 24%. Dell’s current growth rate comfortably outpaces this market average, signaling that the company is not just participating but actively gaining market share in this lucrative space.
Is Dell Technologies a Multibagger in the Making?
Despite its significant advancements in the critical AI infrastructure sector, Dell Technologies often remains overlooked by the broader market. The stock currently trades at approximately 21 times earnings, which appears quite attractive given its robust growth trajectory. The company reported an impressive 18% year-over-year increase in adjusted earnings in the first half of the year, reaching $3.86 per share.
Analysts anticipate that Dell’s double-digit earnings growth will persist over the coming years. According to YCharts data, consensus EPS estimates indicate continued strength. If Dell meets Wall Street’s expectations of reaching $12.37 per share in earnings within a couple of years and its valuation expands to align with the tech-heavy Nasdaq-100 index’s forward earnings multiple (around 27 times), its stock price could theoretically climb to $334. This would represent an increase of almost 2.3 times its current stock price, marking a significant return for investors.
However, given Dell’s pivotal role in the rapidly expanding AI infrastructure market and its potential to exceed current earnings projections, it could command an even higher premium valuation. The company’s future growth could also be bolstered by emerging opportunities in generative AI PCs, further diversifying its revenue streams.
The Long-Term Play: Why Dell Deserves a Spot in Your Portfolio
The U.S. infrastructure boom, propelled by initiatives such as the Bipartisan Infrastructure Law, highlights the essential need for both physical and digital upgrades. While traditional infrastructure companies offer compelling investment cases, Dell Technologies represents a unique opportunity to capitalize on the foundational layer of the future economy: AI compute infrastructure.
For long-term investors seeking exposure to a company with strong earnings visibility, strategic market positioning, and a compelling valuation in a sector experiencing explosive growth, Dell Technologies stands out. It’s a prime example of an “overlooked infrastructure stock” that is quietly powering the next wave of technological advancement and could very well become a multibagger for those willing to look beyond the obvious.
