We recently published a list of 13 Best Edge Computing Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Dell Technologies Inc. (NYSE:DELL) stands against other best edge computing stocks to buy according to hedge funds.
Tech companies have been on a tear in recent years, particularly due to the rise of AI. However, other segments within the tech sector might warrant your attention, like cloud computing, particularly edge computing. Edge computing differs from cloud computing in that it brings computing power to where the data is created. Since data does not have to travel a lot, it can be processed much quicker compared to centralized computing, like Amazon Web Services (AWS). The amount of data being created is growing at an exponential rate as more devices are being connected to the internet. Edge computing makes things easier as data is processed close to where it is made.
The Edge Computing Area is Likely to Get a Push
The edge computing market is expected to get a big push from the rise of artificial intelligence (AI), with total spending projected to reach $380 billion by 2028, according to a new IDC report. Businesses are expected to gradually move away from traditional on-site hardware and instead put more money into cloud-based infrastructure-as-a-service (IaaS) solutions that support AI workloads at the edge. IDC estimates that global spending on edge computing will hit $261 billion in 2025, and that number is expected to grow by nearly 14% each year. The main driver behind this surge is the increasing demand for powerful systems that can handle AI tasks.
According to Alexandra Rotaru of IDC, the Internet of Things (IoT) still leads as the top use case for edge computing, but AI, augmented reality (AR), virtual reality (VR), robotics, and drones are quickly catching up. “IoT is still the biggest, but AI and AR are growing fast. In about a year, AI may become the fastest-growing area,” Rotaru said. Right now, most of the spending is going into on-premises setups—things like servers and storage systems—to meet current needs. Rotaru noted that even though it’s already a large market, there’s still room for growth because this infrastructure is so important.
IDC’s report looked at many industries and found that the biggest edge spending will come from retail, manufacturing, transportation, utilities, and finance. These sectors continue to invest in technology despite economic uncertainties. Rotaru added that recent surveys show businesses are more optimistic about IT spending in 2025 than they were for 2024. This confidence matches findings from a PwC Global AI Study, which reported that most business leaders see AI as a major advantage and are either using it or planning to adopt it soon.
While companies are currently focused on buying hardware, IDC expects many to shift toward cloud and service-provider-based IaaS as time goes on. This opens the door for cloud companies to capitalize on their existing infrastructure. Rotaru said this shift is happening because cloud providers are becoming more capable of handling AI workloads at scale.
Our Methodology
We reviewed edge computing ETFs to compile a preliminary list of stocks and then selected the ones that were the most popular among elite hedge funds, as of Q4 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
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Dell Technologies Inc. (NYSE:DELL)
Number of Hedge Fund holders: 63
For most of its life, Dell Technologies Inc. (NYSE:DELL) has been a hardware company that manufactures computers. However, the company pivoted into the software space several years ago. Dell builds purpose-built hardware to operate in edge environments where there is a dearth of space, power, and network connectivity. It also combines hardware and software for automating and managing edge deployments. The company is also big on analytics and edge AI, which helps businesses analyze data locally and in real time.
Dell Technologies Inc. (NYSE:DELL) recently unveiled a suite of innovations aimed at modernizing data centers for AI applications. These advancements are likely to enhance stability, efficiency, and adaptability of workloads. Given the growing demands of AI workloads, the company is focusing on disaggregating infrastructure that will separate compute, storage, and networking resources. While analysts see a huge upside for this stock, it is not without any headwinds. Analysts warn that the recent tariffs announced by President Trump make some tech stocks like Dell Technologies Inc. (NYSE:DELL) more vulnerable.
Overall, DELL ranks 8th on our list of best edge computing stocks to buy according to hedge funds. While we acknowledge the potential of DELL as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than DELL but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.