Key Points
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Salesforce maintains a leading position in the enterprise software market through its integrated cloud and AI-driven platforms.
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Dell Technologies is pivoting its business toward high-growth AI infrastructure and optimized hardware for data centers.
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Which of these technology leaders offers the best potential for your portfolio in 2026?
- 10 stocks we like better than Salesforce ›
Investors choosing between Salesforce (NYSE:CRM) and Dell Technologies (NYSE:DELL) are weighing the merits of software-as-a-service (SaaS) against physical infrastructure in an era increasingly defined by artificial intelligence integration and cloud computing.
Salesforce focuses on customer relationship management (CRM) through its digital platform, while Dell provides the hardware and servers necessary to power modern computing. Both companies are adapting their business models to capture a larger share of enterprise spending.
The case for Salesforce
Salesforce is a major player among tech stocks because of its dominance in customer relationship management. The company provides cloud-based software and AI tools that help businesses manage sales, marketing, and customer service on a single platform. A recent strategic move includes the June 2026 acquisition of Fin for nearly $3.6 billion to enhance its autonomous agent capabilities.
In its 2026 fiscal year (FY), revenue reached $41.5 billion, representing a growth of nearly 10% over the previous year. This revenue expansion contributed to a net income of $7.5 billion for the period. These figures indicate a net margin of 18%, reflecting the company’s ability to convert sales into profit.
As of its January 2026 balance sheet, the company reported a debt-to-equity ratio of 0.3x. This ratio compares total debt to shareholder equity, while the current ratio of 0.8x measures its ability to cover short-term liabilities with short-term assets. Free cash flow, which is the cash remaining after operating costs and capital expenditures, reached $14.4 billion. Note that stock-based compensation (SBC) represented 23.4% of operating cash flow, which inflates reported cash generation since SBC is a non-cash expense added back in the cash flow statement.
The case for Dell Technologies
Dell provides a wide range of technology solutions, including personal devices, storage, and AI-focused infrastructure. The company serves a diverse global audience across commercial and consumer segments. Recently, it refined its North American distribution strategy by terminating its enterprise computing partnership with Arrow Electronics-owned Arrow Enterprise Computing Solutions.
For FY 2026, the company reported revenue of $113.5 billion, which is growth of nearly 19% compared to the prior year. This led to net income of $5.9 billion. This performance resulted in a net margin of 5% for the fiscal year.
As of its January 2026 balance sheet, the current ratio was 0.9x. The debt-to-equity ratio was -12.8x, which indicates that total liabilities exceed shareholder equity. This negative value is primarily attributed to Dell’s aggressive stock repurchase initiative, which significantly reduced the outstanding share count. Free cash flow for the year reached $8.6 billion, representing the cash generated from operations minus money spent on capital assets.
Risk profile comparison
Salesforce faces significant competition from established enterprise vendors like Microsoft and various AI-native startups. The company is currently engaged in an antitrust lawsuit against Microsoft regarding the bundling of collaboration software. Additionally, it faces legal scrutiny through a class action investigation and must manage persistent cybersecurity threats to its cloud data.
Dell Technologies relies heavily on third-party vendors and contract manufacturers in Asia, creating potential supply chain vulnerabilities. It faces intense pressure in the hardware market. The company also faces litigation from XTX Markets, and must defend against ongoing cyber threats targeting its supply chain.
Valuation comparison
Salesforce currently trades at a significantly lower earnings multiple than Dell, although Dell offers a more attractive valuation when looking at total sales.
MetricSalesforceDell TechnologiesSector BenchmarkForward P/E12.1×21.7×33.8xP/S ratio3.4×2.3xn/a
Sector benchmark uses the SPDR XLK sector ETF. Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2026?
Artificial intelligence has impacted the share price performance for both Salesforce and Dell this year, but in exactly opposite ways. Wall Street’s fear that AI would eat into Salesforce’s CRM business caused a sell-off that drove shares to a 52-week low of $146.32 in June. Meanwhile, AI’s need for massive amounts of computing hardware resulted in a surge in sales that powered Dell’s stock to a 52-week high of $469.47 that same month.
It would seem Dell is obviously the better stock to buy. After all, the company reported record revenue of $43.8 billion for its fiscal first quarter, ended May 1, which represents an impressive 88% year-over-year increase. Dell’s soaring sales contributes to the stock’s low P/S ratio.
However, Salesforce’s business does not appear impacted by AI. In reality, revenue in its fiscal first quarter, ended April 30, rose 13% year over year to $11.1 billion. The company has responded to the AI threat by launching its own AI solutions tailored specifically to CRM, and that contributed to its decision to acquire Fin.
Because of Wall Street’s sell-off, Salesforce is the better stock to buy. Its low forward earnings multiple suggests it is at a compelling share price, and once investors begin to realize AI is not a danger to its business, Salesforce shares will be poised to rise.
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Robert Izquierdo has positions in Dell Technologies, Microsoft, and Salesforce. The Motley Fool has positions in and recommends Microsoft and Salesforce. The Motley Fool has a disclosure policy.
