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원문 링크: https://247wallst.com/investing/2026/08/18/the-best-ai-trade-of-2026-isnt-a-chip-stock/?.tsrc=rss

The Best AI Trade of 2026 Isn’t a Chip Stock

The best AI infrastructure trade of 2026 could be a server maker. Dell Technologies ( NYSE:DELL | DELL Price Prediction ) trades at $490.81, up 293.52% year to date on record AI server orders. Our 24/7 Wall St. price target is $560.77, implying 14.25% upside over 12 months. We rate Dell a buy with 90% confidence.

Dell’s Q1 FY27 earnings on May 28, 2026 reframed the AI trade. Revenue hit $43.84 billion, up 87.54% YoY, with non-GAAP EPS of $4.86 beating consensus by nearly 64%.

AI-optimized server revenue reached $16.13 billion (+757% YoY), and management booked $24.4 billion in AI orders in a single quarter, exiting with a $51.3 billion AI backlog. The stock has climbed 19.12% in the past month and sits 2% from its 52-week high of $514.

Our bull scenario points to $585.31, or roughly 19% upside . Dell raised FY27 revenue to $165 to $169 billion and non-GAAP EPS to $17.90 at midpoint, up 74% YoY. CEO Jeff Clark said “ demand continues to exceed supply ” and framed customer conversations as “multi-year in nature. Think three, four, five years.”

ISG operating margin expanded to 10.5%, with agentic AI layering in as a fresh tailwind for traditional servers. 19 buy or strong buy ratings against zero sells show sell-side alignment with the bull view.

Our bear case lands at $422.16, a 14% drawdown. Q1 gross margin compressed to 17.8% from 21.1% YoY as low-margin AI servers dominate mix. Negative stockholders’ equity of -$1.4 billion and hyperscaler concentration pose real risks.

Operating income still grew 213.82% YoY, offsetting the mix shift. A beta of 1.4 means any AI capex pause would hit Dell harder than the market.

Hewlett Packard Enterprise ( NYSE:HPE ) is the closest enterprise server analog. HPE raised FY26 non-GAAP EPS guidance to $3.35 to $3.45 after posting Q2 revenue of $10.68 billion, up 40% YoY. HPE’s FY27 framework calls for 8% to 12% revenue growth, well below Dell’s 47% FY27 guide. Dell is scaling faster and returning more capital, supporting a premium.

Super Micro Computer ( NASDAQ:SMCI ) is the AI server pure play. SMCI guided FY27 revenue to $65 to $72 billion and trades at a P/E near 12.

The cheap multiple reflects margin instability (Q1 FY26 GAAP gross margin was 9.3%) and an ongoing board review tied to export-control matters . Dell’s diversified ISG and CSG mix earns its higher multiple. The peer set supports our $560.77 target as a reasonable read.

The 24/7 Wall St. price target of $560.77 is our high-conviction call, backed by 90% model confidence and a forward P/E of 27 that looks fair given 74% EPS growth guidance.

The bull thesis rests on hyperscaler AI capex holding through 2027 (Dell is one server maker inside that buildout, and we mapped seven other non-chip AI infrastructure names in a free report ). The bear thesis kicks in if memory and GPU supply loosen in a way that cracks pricing power.

Extending the 24/7 Wall St. price target model forward, here is where Dell could trade assuming ISG growth normalizes and traditional server refresh cycles support the base.

These projections assume Dell converts AI backlog to revenue and defends ISG operating margins. Significant upside or downside could result from hyperscaler AI capex trajectory or a sustained shift in GPU allocation away from Dell’s platforms.

Contact [email protected] for any questions or corrections.

Source: https://247wallst.com/investing/2026/08/18/the-best-ai-trade-of-2026-isnt-a-chip-stock/?.tsrc=rss