Dell's AI Server Backlog Signals Nvidia Supercycle

Nvidia (NASDAQ: NVDA), the world's largest company by market cap, isn't showing any signs of slowing down thanks to the artificial intelligence (AI) infrastructure boom.

The company's revenue more than doubled in the previous quarter to $96.2 billion, accelerating from the year-ago period's growth rate of 56%. The good news for Nvidia stock investors is that its impressive growth is sustainable. The company's $108 billion revenue guidance for the current quarter points to a 90% year-over-year increase.

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What's more, the company sees cloud infrastructure spending jump significantly. CEO Jensen Huang recently reaffirmed his projection of $3 trillion to $4 trillion in global AI infrastructure spending in 2030. That's well above the 2026 estimate of $800 billion, according to PwC.

This explains why Nvidia is confident of achieving 70% revenue growth in the next fiscal year, which is impressive considering its huge revenue base. So, Nvidia remains a solid long-term investment, given its promising outlook.

However, investors can capitalize on Nvidia's booming growth by investing in shares of Dell Technologies (NYSE: DELL) as well. Let's see why that may be a good move.

Nvidia's AI chips are fueling demand for Dell's servers

Dell offers various server types equipped with Nvidia's chips tailored for AI workloads. Dell management noted on its recent earnings call that it is "the first to ship Rack Systems engineered on the Nvidia Vera Rubin platform," the semiconductor giant's latest AI chip architecture.

So, hyperscalers and AI companies looking to deploy Nvidia's AI chips are turning to Dell to purchase its rack-scale servers. Not surprisingly, Dell is experiencing incredible growth. The company's revenue increased 58% year over year in the second quarter of fiscal 2027 to a record $47 billion. More importantly, it received almost $61 billion in orders for AI servers during the quarter, exceeding its revenue.

Dell ended the quarter with an AI server backlog of $95 billion. It is worth noting that Dell has converted $131.7 billion worth of AI server orders into revenue over the past year. Looking ahead, the company is on track to sustain its impressive AI server revenue growth, driven by a healthy order pipeline, which it claims is "multiples of our backlog."