AI hardware demand rises, impacting Oracle and Dell stocks

The demand for artificial intelligence (AI) hardware has significantly increased in recent years. Technology companies and governments are investing billions in creating advanced AI systems. A market research firm predicts that global AI spending will reach $337 billion this year and could double to $749 billion by 2028. This surge in spending is expected to benefit both Oracle and Dell Technologies, two major players in the tech industry. However, both companies' stocks have faced declines this year, with Oracle down 10% and Dell down 16%. Oracle has traditionally provided database management software but is now expanding rapidly in AI. The demand for its cloud infrastructure for AI applications is very high. In its latest quarter, Oracle's cloud revenue grew by 51% compared to last year, far surpassing the overall revenue growth of 8%. The company is eager to increase its cloud capacity to meet rising demand, as the cloud market is projected to grow significantly. Oracle anticipates a 15% revenue growth in the next fiscal year, with further growth expected in the following years. Dell Technologies is also benefiting from the growing demand for AI servers, which are essential for processing large data sets. The company leads the server market, having achieved a 29% revenue increase in its infrastructure segment last year. Dell sold $10 billion in AI servers last year and expects this revenue to rise by 50% this fiscal year. The company has a backlog of orders valued at $9 billion, indicating strong future sales potential. However, Dell's overall revenue growth is projected to remain flat at 8% for the current fiscal year. In conclusion, both companies have promising futures. Oracle seems to have a stronger growth outlook, bolstered by its rapid cloud infrastructure expansion. Dell has potential with its server and AI PC markets but may need to recover its PC business for higher growth. Investors may find Oracle to be the safer bet for long-term growth, while Dell may attract those looking for less expensive stocks.