What's the Better Stock Right Now: Hewlett Packard Enterprise or Dell?
Key Points
HPE's networking revenue increased 148% in the second quarter of 2026.
Dell's AI server revenue grew an eye-popping 757% year over year.
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Hewlett Packard Enterprise (NYSE: HPE) and Dell Technologies (NYSE: DELL) are booming amid the AI infrastructure-building spree. Both are experiencing explosive growth, but which stock is the better long-term pick right now? Let's have a look.
HPE's network skyrockets
HPE just reported a record Q2, with revenue reaching $10.7 billion, and its EPS beat estimates by $0.79. Revenue grew 40% year over year. Specifically, networking revenue grew by over 148%, and the Cloud and AI segment increased 23%.
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HPE raised its full fiscal 2026 revenue growth range to 29% to 33%, a huge bump from the 17% to 22% outlook from the previous quarter. Shares of HPE are up almost 124% this year as of this writing.
Dell exceeds all expectations
HPE's quarterly numbers were excellent, but Dell's were jaw-dropping. AI server revenue grew an astounding 757% year over year, reaching $16.1 billion. Total revenue increased 88% year over year. The company blew past Wall Street expectations for EPS, reporting earnings of $4.86, well above the $2.94 consensus.
Dell's share price is up more than 234% year to date as of this writing.
Image source: Getty Images.
Because of Dell's skyrocketing stock price, the company's valuation metrics are now quite high. HPE is also trading with higher metrics, but Dell has a higher forward and trailing price-to-earnings (P/E) ratio, price-to-sales ratio, and enterprise value to EBITDA.
Who we choose as the winner is a nuanced decision. Dell is a higher-risk, higher-reward stock than HPE. Dell is benefiting from historic AI revenue acceleration, whereas HPE is a steadier and more diversified business. At the same time, HPE offers improving margins and a cheaper valuation.
If you're an aggressive investor with a risk appetite, Dell is a solid choice based on the company's momentum. For those who don't want to be quite as aggressive, HPE's stock is compelling in a red-hot market with frothy valuations, thanks to its more down-to-earth pricing.
Ultimately, the stock you choose depends on your personal risk profile, but both HPE and Dell are winners in the AI infrastructure boom.
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Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Hewlett Packard Enterprise. The Motley Fool has a disclosure policy.
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