In This Article:
Dell Technologies DELL and Microsoft MSFT are major players in the cloud computing domain, offering infrastructure, software, and services to enterprise clients. DELL, through its infrastructure solutions and rich partner base, provides essential hardware and services that support cloud environments. Microsoft, with its Azure platform, offers a comprehensive suite of cloud services that includes AI and machine learning capabilities.
According to the Grandview Research report, the global cloud computing market size was valued at $752.44 billion in 2024 and is expected to witness a CAGR of 20.4% from 2025 to 2030. Both DELL and MSFT are likely to gain from the massive growth opportunity highlighted by the growth pace.
So, DELL or MSFT — Which of these cloud stocks has the greater upside potential? Let’s find out.
The Case of DELL Technologies
DELL is expanding its cloud services through its APEX platform, offering multi-cloud solutions and AI infrastructure.
In the fourth quarter of fiscal 2025, Infrastructure Solutions Group (ISG) revenues, which include its cloud offerings, increased 22% year over year to $11.35 billion. The upside can be attributed to servers and networking revenues of $6.63 billion, which grew 37% year over year, driven by demand strength across both AI and traditional servers.
Dell’s AI prospects remain strong, with AI expanding from major cloud service providers to large-scale enterprise deployments and edge computing with PCs.
Dell is benefiting from the strong demand for AI servers, which are driven by ongoing digital transformation and heightened interest in generative AI applications. Its PowerEdge XE9680L AI-optimized server is in high demand. Strong demand from enterprises for AI-optimized servers is driving growth for Dell.
The company’s expanding portfolio has been noteworthy. In March 2025, Dell partnered with Singapore’s Institute of Technical Education to launch a hybrid cloud VDI Centre powered by Dell VxRail, aimed at closing the AI skills gap and enhancing digital learning through accessible, flexible, and scalable infrastructure.
The Case of Microsoft
Microsoft is benefiting from strong demand for cloud and AI offerings. Microsoft Cloud revenues reached $42.4 billion, growing 21% year over year and 22% in constant currency, in the third quarter of fiscal 2025.
Azure, in particular, experienced strong demand, especially for AI services, which significantly contributed to the cloud’s performance. In the fiscal third quarter, Azure and other cloud services revenues grew 33% (up 35% in cc), including 16 points from AI services.
The increasing demand across industries, with major customers like Abercrombie & Fitch, Coca-Cola, and ServiceNow expanding their use of Azure, has been a key catalyst. Microsoft remains the cloud of choice for customers’ mission-critical VMware, SAP, and Oracle workloads, with more regional availability than any other hyperscaler.
The company also expanded its footprint in its cloud offerings, including scaling data centers, optimizing hardware, and reducing costs in AI workloads. Key AI capabilities, including the Foundry platform, GitHub Copilot, and M365 Copilot, have driven increasing customer adoption, contributing to Microsoft’s cloud and AI-driven growth.