Prediction: This Artificial Intelligence (AI) Stock Could Ride Nvidia's "Golden Wave" Next
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There will be many winners as infrastructure is built to support the huge and increasing computing power needed for artificial intelligence (AI) applications. Nvidia continues to pave the way and...
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July 3, 2025
06:46 AM
The Motley Fool
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There will be many winners as infrastructure is built to support the huge and increasing computing power needed for artificial intelligence (AI) applications
Nvidia continues to pave the way and has already been a huge beneficiary thanks to its leading advanced chips, software, and engagement with developers
Nvidia's revenue has soared from what was then a record $61 billion in fiscal 2024 to more than $130 billion in its fiscal year 2025, Jan
That growth continues as sales in the first half of fiscal 2026 are expected to be apximately $90 billion
It's all the company's data center segment, as companies -- as well as sovereign nations -- quickly invest in infrastructure to expand AI capabilities
That infrastructure includes servers and cooling systems that are vided by Dell nologies (DELL 1
The company's revenue has also been soaring, and it is well positioned to ride AI's "golden wave" along with Nvidia
Image source: Getty Images
Nvidia's AI factories are filling Dell's backlog Dell isn't a pure-play AI stock, but it has already seen benefits from the AI revolution
Revenue hasn't soared quite as much as it has for Nvidia, but Dell's Infrastructure Solutions Group saw sales hit a record $43. 6 billion in fiscal 2025, up 29% year over year
Zoom in specifically to its AI server, though, and the growth is more impressive
Server shipments generated nearly $10 billion, up over sixfold from $1. 5 billion in fiscal year 2024
Demand continued to grow in the company's fiscal 2026 first quarter, and the period on May 2 with a $14. 4 billion AI backlog
Chief operating officer Jeff Clarke called the demand unprecedented, adding, "We generated $12. 1 billion in AI orders this quarter alone, surpassing the entirety of shipments in all of [fiscal 2025]. " That's all because of the huge data centers and AI training factories being built by large growth companies as well as sovereign governments -- all of it supported by Nvidia and its powerful ducts
Meta Platforms, Amazon, Alphabet, and Microsoft collectively have plans to spend as much as $320 billion this year to expand AI capabilities
Another group of companies is partnering with ChatGPT creator OpenAI for the Stargate ject, with another $500 billion in AI infrastructure investments planned over the next several years
OpenAI has also started a gram intending to help regions outside the U
Launch large AI jects
Dell servers will ly be part of most of this development
It's why the stock has quickly rebounded from its April lows
More reasons to own Dell That growth is driving investors to Dell stock
But there are other reasons to own it, too
The company's Client Solutions personal computer segment is also integrating AI for commercial and retail clients
That segment vides a stable cash flow base and it generated more revenue than the Infrastructure Solutions group last year
Management is returning some of that cash flow to holders
It increased its annual dividend by 18% for the current fiscal year, and its board of directors apved a $10 billion increase in its repurchase authorization
The company says it is committed to returning at least 80% of its adjusted free cash flow to holders
It also plans to raise its dividend at least 10% annually through fiscal year 2028
That holder-friendly apach should make investors feel good
Yet surging demand and a large and growing backlog for its AI servers are what really make it a good time to buy Dell stock
It has more runway ahead to ride the golden wave of AI along with Nvidia
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors
Howard Smith has positions in Alphabet, Amazon, Dell nologies, Microsoft, and Nvidia
The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia
The Motley Fool recommends the ing options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft
The Motley Fool has a disclosure policy.
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