AI PC Momentum: How Dell Technologies Is Competing for Market Share Against HP and Apple

The personal computer market is undergoing a significant transformation driven by artificial intelligence capabilities, and Dell Technologies DELL is gaining traction in this pivotal shift. However, the company faces intensifying competition from established rivals HP HPQ and Apple AAPL, who are also capitalizing on the AI-enabled computing wave.

Market Dynamics: The AI PC Opportunity

Dell’s momentum in the AI PC segment is reshaping its business outlook. The company’s Client Solutions Group (CSG) posted revenues of $12.47 billion in the third quarter of fiscal 2026, reflecting a modest 3% year-over-year increase. However, the underlying trends are more encouraging: commercial revenue achieved its fifth consecutive quarter of growth, expanding 5% to $10.6 billion, while consumer revenue demonstrated recovery with positive growth for the first time in three years.

The core driver behind this trajectory is multifaceted. First, the Windows 11 upgrade cycle remains far from completion. Approximately 500 million PCs currently have the capability to run Windows 11 but have not yet been upgraded. Additionally, another 500 million devices in the installed base are over four years old and lack Windows 11 compatibility. This creates substantial headroom for market share gains as organizations and individual buyers refresh their computing infrastructure.

Second, AI-powered personal computers featuring neural processing units (NPUs) and advanced processors are reshaping customer preferences. These machines enable on-device AI applications and lightweight language models, addressing growing demand for more intelligent and responsive computing experiences. Dell’s traction in positioning these devices to enterprise and consumer segments represents a meaningful growth vector.

Competitive Landscape: HP and Apple Accelerate

While Dell pursues AI PC opportunities, competitors are moving swiftly. HP has emerged as a formidable player in the AI PC market, with AI-enabled devices accounting for more than 30% of total PC shipments in the fourth quarter of fiscal 2025—reaching this threshold earlier than anticipated. These higher-capability machines command 5-10% premium average selling prices, meaningfully improving unit economics and gross margins.

Apple’s Mac division is equally noteworthy. Mac sales surged 12.7% year-over-year to $8.5 billion in the fourth quarter of fiscal 2025, representing 8.5% of total company revenue. The company strengthened its position through portfolio expansion, introducing the M5 chip-powered 14-inch MacBook Pro alongside refreshed iPad Pro models with updated processors. This integrated ecosystem approach continues to differentiate Apple in the premium segment.

Valuation and Investment Metrics

DELL shares have appreciated 22.1% over the trailing six-month period, trailing both the broader Zacks Computer & Technology sector’s 26.2% gain and the Zacks Computer - Micro Computers industry’s 36.5% surge. This relative underperformance has left the stock attractively valued from a fundamental perspective.

The company trades at a forward 12-month Price/Sales ratio of 0.75X, substantially discounted compared to the Computer & Technology sector’s 6.79X multiple. DELL carries a Zacks Value Score of A, reflecting its reasonable valuation profile. Analyst consensus for fiscal 2026 earnings stands at $9.89 per share, having increased 3.6% over the past 30 days and implying 21.50% year-over-year earnings growth.

DELL currently maintains a Zacks Rank #3 (Hold) rating. While the PC market is expected to remain essentially flat year-over-year at the aggregate level, Dell’s concentration on high-growth AI-enabled devices and the extended Windows 11 replacement cycle provide differentiated catalysts relative to industry peers.