CSCO vs. DELL: Which AI Enterprise Infrastructure Stock is a Buy?
Cisco Systems CSCO and Dell Technologies DELL are key providers of AI-powered enterprise infrastructure solutions.
Cisco offers network infrastructure to power AI training and inference workloads for both webscalers and enterprises with high-density routers and switches, improved network management, and high-performance optics. The company has been infusing AI into its networking, security, collaboration and observability offerings.
Meanwhile, Dell Technologies offers infrastructure solutions across servers, networking, and storage. DELL offers secure, integrated solutions that cover the edge to the core to the cloud. Its Infrastructure Solutions Group offers solutions that address AI, machine learning, data analytics, and multicloud environments.
According to IDC, spending on AI infrastructure will surpass $200 billion by 2028, with 75% of the spending on servers with embedded accelerators. Gartner forecasts Global IT spending to reach $5.61 trillion in 2025, with data center systems experiencing growth of 23.2% to reach $405.5 billion. Enterprises operating large-scale hyperscale data center infrastructure will account for more than 70% of spending on AI-optimized servers in 2025, hitting $202 billion.
Both companies are benefiting from strong demand for AI infrastructure and data center build-outs. Shares of Dell Technologies and Cisco have appreciated 11% and 16.2% year to date.
DELL and CSCO Stock’s Performance
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However, which AI infrastructure provider, DELL or CSCO, is well-poised to maintain the momentum? Let’s find out.
CSCO Benefits From Strong Security Demand, AI Push
Cisco’s aggressive AI push and growing security dominance are noteworthy. Cisco secured AI infrastructure orders worth more than $1 billion to date in fiscal 2025, a quarter ahead of schedule. The company is expanding its AI portfolio for data centers with new solutions like the Unified Nexus Dashboard, Cisco Intelligent Packet Flow, configurable AI PODs and 400G bidirectional (BiDi) optics. Moreover, Cisco’s expanded partnership with NVIDIA, under which the companies plan to offer solutions that help build AI-ready data center networks, is a game changer.
Cisco’s security business is benefiting from strong demand for both Cisco Secure Access, Hypershield and XDR. On a combined basis, these solutions added more than 370 customers in the fiscal third quarter. The acquisition of Snap Attack enhances Splunk’s capability.
Expanding security portfolio is positive. Cisco’s latest Duo Identity and Access Management (IAM) solution helps enterprises fight continuing identity-based attacks. Duo IAM strengthens Cisco’s approach to user-friendly Zero Trust security. In June, the company announced enhanced security solutions embedded deep into its networking infrastructure, which will help companies implement zero-trust architectures. Cisco’s Hybrid Mesh Firewall and Universal Zero Trust Network Access solutions simplify policy management, enhance visibility and enable enterprises to scale securely.
DELL Benefits From Expanding Portfolio
Dell Technologies’ PowerEdge XE9680L AI-optimized server is in high demand. Strong enterprise demand for AI-optimized servers is aiding the company. DELL shipped $1.8 billion worth of AI servers in the fiscal first quarter, and the AI server backlog remained healthy at $14.4 billion.
Apart from AI servers, Dell Technologies is expanding its footprint in cloud computing. The company’s expansion of cloud services through its infrastructure solutions and rich partner base provides essential hardware and services that support cloud environments. Through its APEX platform, DELL provides multi-cloud solutions and advanced AI infrastructure, which have become key highlights of its offerings.
Dell Technologies' expanding portfolio of solutions is a key catalyst. In May 2025, DELL introduced advanced innovations in storage, cyber resilience and automation to modernize disaggregated data centers. These enhancements boost performance, security, and efficiency across private cloud and edge environments.
DELL’s and CSCO’s Earnings Estimate Revision Positive
The Zacks Consensus Estimate for DELL’s fiscal 2026 earnings is pegged at $9.44 per share, up by a penny over the past 30 days, indicating a 15.97% increase over fiscal 2025’s reported figure.
Dell Technologies Inc. Price and Consensus
Dell Technologies Inc. Price and Consensus Dell Technologies Inc. price-consensus-chart | Dell Technologies Inc. Quote
The consensus mark for Cisco’s fiscal 2025 earnings has been steady at $3.79 per share over the past 30 days, suggesting 1.61% growth over fiscal 2024.
Cisco Systems, Inc. Price and Consensus
Cisco Systems, Inc. price-consensus-chart | Cisco Systems, Inc. Quote
Valuation: DELL is Cheaper Than CSCO
Dell Technologies is trading cheap, as suggested by the Value Score of B. However, a Value Score of D suggests Cisco is overvalued.
In terms of forward 12-month Price/Sales, Dell Technologies shares are trading at 0.81X, significantly lower than Cisco’s 4.61X.
CSCO and DELL Valuation
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DELL is a Better Buy Than CSCO
Dell Technologies is benefiting from strong demand for AI servers and an expanding partner base that includes the likes of NVIDIA, Microsoft and Meta Platforms. Cisco’s aggressive AI push and growing security dominance have been major growth drivers. However, DELL’s cheap valuation makes the stock attractive for investors.
Dell Technologies sports a Zacks Rank #1 (Strong Buy), making the stock a better buy compared with Cisco, which currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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