SNDK vs. DELL: Which AI Infrastructure Stock is the Better Buy?

SanDisk Corporation SNDK and Dell Technologies DELL are both prominent participants in the AI infrastructure buildout. SanDisk supplies flash memory and storage that increasingly underpins AI data center capacity, while Dell integrates compute, storage and networking into AI-ready systems deployed across those same data centers. Both companies are exposed to the storage side of this buildout, even as they sit at different layers of the stack.As enterprises continue committing capital toward AI infrastructure, both companies are well-positioned to benefit from rising demand. Let's delve deep to determine which stock is a better buy.The Case for SNDKSandisk makes NAND flash memory, built on its BiCS8 technology platform. As AI systems grow bigger, they need to hold more information while working, and NAND flash has become the cheapest way to give them that storage at scale.SNDK’s revenues for the third quarter of fiscal 2026 jumped to $5.95 billion, up 251% from a year earlier, while gross margin expanded to 78.4% from 51.1% in the prior quarter as the AI data center segment grew at 233% sequentially. The quarter also brought a push to secure future supply, with Sandisk extending its Kioxia manufacturing joint venture through December 2034 and investing $1 billion in Nanya Technology for DRAM access, pointing to demand that extends well beyond the current upcycle.Under its New Business Model framework, Sandisk has signed five multiyear deals, some running as long as five years, guaranteeing $42 billion in future revenues and backed by $11 billion in financial guarantees. These contracts mix fixed and variable pricing and already cover more than a third of expected bit shipments in fiscal 2027, reducing exposure to the boom and bust cycles that have long defined the NAND industry.The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $19.42 billion, implying growth of 163.99%, while the consensus mark for EPS is pegged at $65.68 compared with $2.99 in fiscal 2025, revised up by 1.32% over the past 30 days.Sandisk Corporation Price and Consensus Sandisk Corporation price-consensus-chart | Sandisk Corporation QuoteThe Case for DELLDell integrates AI-optimized servers with enterprise storage systems such as PowerStore, PowerScale, PowerMax and ObjectScale into deployable AI factory solutions, capturing both compute and storage dollars in an AI deployment, reinforced by an expanding partner ecosystem that includes NVIDIA, Google Cloud and OpenAI.DELL's revenues for the first quarter of fiscal 2027 jumped to $43.84 billion, up 88% from a year earlier, driven by the Infrastructure Solutions Group, which grew 181% to $29.01 billion as AI server revenues reached $16.1 billion on $24.4 billion of new orders. The gap between orders and revenue points to demand running ahead of what Dell can ship, a sign of pricing power.Dell's AI backlog sits at a record $51.3 billion, reflecting memory chips as the binding constraint, pushing customers to lock in capacity well ahead of need. Fiscal 2027 revenues are expected to be between $165 billion and $169 billion, with AI-optimized server revenues near $60 billion, indicating that growth from here depends less on winning new orders and more on working through demand already locked in, while a forward pipeline that still runs ahead of the backlog points to more orders to come.The Zacks Consensus Estimate for fiscal 2027 revenues is pegged at $167.29 billion, implying growth of 47.35%, while the consensus mark for EPS is pegged at $18.66 versus $10.30 in fiscal 2026, revised up 42.2% over the past 30 days.Dell Technologies Inc. Price and Consensus Dell Technologies Inc. price-consensus-chart | Dell Technologies Inc. QuoteSNDK vs. DELL: Price Performance and ValuationYear to date, shares of DELL have jumped 244.8%, trailing SNDK's 706.5% return. Both stocks have benefited from strong AI infrastructure demand, with Sandisk's gain led by a tight NAND supply environment and a string of new multiyear pricing contracts and Dell's supported by its broader AI server, storage and PC portfolio.SNDK vs. DELL: YTD PerformanceImage Source: Zacks Investment ResearchSNDK currently trades at a forward 12-month price to sales (P/S) multiple of 6.25X, well above DELL's 1.63X. Sandisk's premium to Dell appears difficult to justify given Dell's larger AI backlog, broader enterprise reach and a growing AI factory partner ecosystem spanning compute, storage and PCs.SNDK vs. DELL: Forward 12-Month P/S ValuationImage Source: Zacks Investment ResearchConclusionBoth Dell and Sandisk are well-positioned to capitalize on the broader AI infrastructure buildout. While Sandisk continues to deliver explosive growth tied to tight NAND pricing and data center demand, Dell has significantly strengthened its position through a record AI backlog and an expanding AI factory ecosystem spanning servers, storage and PCs. Given its larger and more diversified revenue base, lower valuation and broader enterprise reach, DELL appears to offer a more compelling investment opportunity than SNDK.DELL and SNDK sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today's Zacks #1 Rank stocks here.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.See Stocks Now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks