If excitement over artificial intelligence (AI) caused a stock market bubble in 2025, major technology players plan to inflate it more than ever in 2026.
AI stocks have soared because investors have high expectations for future financial results. Big tech is proving those hopes are well-founded. The four major hyperscalers, including Alphabet (GOOG +0.18%)(GOOGL +0.27%), plan to spend roughly $650 billion in 2026 on capital expenditures (capex), much of which will be directed toward AI. In other words, investors should brace themselves for unprecedented AI infrastructure spending this year.
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Some investors fear there's an AI bubble that will soon pop. But I believe that this unprecedented wave of spending will likely prevent an implosion anytime soon. And this is why I believe that investors should consider Dell Technologies (DELL 1.33%) today -- hear me out.
Why investors should look at Dell stock
Dell stock is often overlooked among AI infrastructure investments, but the business is experiencing an incredible surge in demand for its AI server products. As of its fiscal third quarter of 2026 (which ended on Oct. 31), the company said orders for AI servers were at an all-time high, as was its backlog of $18.4 billion.
Here's where things get interesting: Alphabet intends to spend at least $175 billion in capex in 2026 -- a huge portion of the aforementioned $650 billion. Analysts wanted to know exactly where the money will be going. In response, management said it plans to spend about 60% on servers.
NYSE: DELL
Key Data Points
In short, Alphabet intends to spend over $100 billion on servers in 2026. And keep in mind that Alphabet is just one company, and the other three hyperscalers will need servers as well, to say nothing of other companies, presenting a massive tailwind for the server market.
Now, some might say that this doesn't necessarily portend anything for Dell. After all, the hyperscalers often use white box servers -- servers without branding, such as Dell's.
However, unprecedented server demand in 2026 will likely create an imbalance between supply and demand across the entire space, much like what's happening with computer memory right now. In other words, I believe this surging demand for AI servers will benefit Dell, even if the benefit is indirect.
Bubbles occur when investors' expectations (and, consequently, valuations) get too far ahead of business fundamentals. However, I would say investors' expectations for Dell stock are modest right now. As of this writing, it trades at less than 11 times its forward earnings, which is quite reasonable.
DELL PE Ratio (Forward) data by YCharts
In conclusion, Dell stock is a low-risk investment because its business is stable, its products are in high demand, and the valuation is cheap. Demand for AI servers will be higher than ever in 2026, which makes this a stock to at least consider today.
