MSFT, DELL And Intel: Which Is The Better Buy

"Microsoft is down 14.21% YTD and off 2.47% over the past week, even after Q3 FY26 delivered EPS of $4.27 vs. $4.07 expected and revenue of $82.89 billion, up 18.3% YoY. Azure grew 40%, Microsoft Cloud reached $54.5 billion, and the AI business hit a $37 billion annual run rate, up 123% YoY. Commercial RPO sits at $627 billion. Trailing P/E is 25 and forward P/E is 21."

"Capex hit $30.88 billion, up 84% YoY, and More Personal Computing slipped 1%. Even so, analyst consensus stands at $559.85 with 9 Strong Buy, 42 Buy, 3 Hold, and 0 Sell ratings. The spread between consensus and spot is wide. Microsoft has materially outperformed the broader market over five years (+70.89%) while the recent drawdown has cooled the multiple. The pullback has reset the multiple against accelerating AI revenue."

"Dell is up 91.17% YTD and 158% over one year, closing fractionally below a 52-week high of $239.45. Q4 FY26 was landmark: revenue $33.38 billion, up 40.2% YoY, AI-optimized server revenue $8.95 billion, up 342%, a $43 billion AI backlog, and FY27 guidance of $138 billion to $142 billion (up 23% at the midpoint) with AI servers near $50 billion."

"The catch is the consensus. Forward P/E is 16, but the analyst target is $187.65, well below spot, with 5 Strong Buy, 14 Buy, 7 Hold, and 1 Sell. GAAP gross margin compressed to 2"

Microsoft screens attractive at $413.96 after a pullback that cooled its valuation multiple. Recent results show accelerating AI momentum, including strong Azure growth, a large Microsoft Cloud figure, and an AI business reaching a $37 billion annual run rate, alongside rising commercial RPO. Dell looks fully valued at $238.80 after a sharp AI-driven rally, with landmark quarterly results, rapid AI-optimized server growth, a sizable AI backlog, and guidance pointing to continued expansion. Intel appears overextended at $113.01 because its rebound has outpaced fundamentals, even though all three have benefited from the AI infrastructure cycle.

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