A U.S. Navy Request For Information (RFI) has outlined the future of subsurface naval combat capability within the AN/BYG-1 combat system, the U.S. Navy’s undersea warfare combat system used on all American in-service submarines, as well as submarines operated by the Royal Australian Navy.

The RFI lays out three core capability updates; a tactical control re-architecture and integration plan, a payload re-architecture and integration plan, and the development and integration of a new Artificial Intelligence, Machine Learning (AI/ML) Tactical Decision Aid (TDA).

The notice was posted by the PEO UWS Submarine Combat and Weapons Control Program Office (PMS 425). According to PMS 425, various requirements are being laid out to support a new method of integrating submarine warfare systems and weapons in a more streamlined manner.

The new capabilities delivered by a selected contractor will be fielded by the U.S. Navy, the Royal Australian Navy, and, according to PEO UWS, potentially the Australia/UK/US (AUKUS) Joint Program Office submarine as well.

The RFI lists a large number of requirements for AN/BYG-1 modifications, which include containerization of AN/BYG-1 capabilities, integration of new strike components, addition of tactical decision aids that leverage artificial intelligence and machine learning, integration of third party capabilities with AN/BYG-1, delivery of incremental AN/BYG-1 application software builds every thirteen weeks, and continued integration efforts for the Compact Rapid Attack Weapon (CRAW), unmanned underwater vehicles (UUV), heavyweight torpedoes (HWT), unmanned aerial systems (UAS), and undersea countermeasures.

The notional award date for a contract to deliver these capabilities is set sometime in July 2027 with one base year and four option years. The U.S. Navy expects delivery of systems to be in ready-to-run fashion as a certified, fully-tested, production-ready hardware and software suite by delivery.

The AN/BYG-1 is expected to take a much heavier role in defensive and offensive management with the addition of Mk 58 CRAW torpedoes, added to U.S. Navy attack submarines. CRAW is a capability developed by university and industry teams that aims to dramatically increase the number of packed torpedoes in each tube, according to the U.S. Navy. The Office of Naval Research developed the multi-packing technology as part of Project Revolver, a new launch capability for Virginia-class submarine torpedo tubes. CRAW will also add a defensive anti-torpedo capability to attack submarines when fielded in its Increment 2 variant.

The future AN/BYG-1 combat system will manage all aspects of offensive and defensive engagements with CRAW, as well as other UUV delivery methods like those currently being sought by the Defense Innovation Unit which seek to deliver 12.75″ UUVs for one-way attack missions, extending the reach of CRAW or other novel weapons.

Key Points

• Dell stock has trailed the market so far in 2025, but its poor performance doesn’t seem justified.

• Growth has been accelerating, helped by the company’s healthy share of the AI server market.

• The stock’s valuation is too cheap to ignore right now, and buying it could turn out to be a smart move.

• 10 stocks we like better than Dell Technologies ›

The healthy spending on artificial intelligence (AI) infrastructure and devices has been a tailwind for Dell Technologies (NYSE: DELL) in recent quarters, but shares of the company have struggled to gain any momentum on the market despite an improving growth profile.

Specifically, Dell stock has gained just 5% in 2025 as of this writing. That’s half of the returns clocked by the tech-laden Nasdaq Composite index this year. The stock received another shock recently as it dropped lower following the release of its fiscal 2026 second-quarter results (for the three months ended Aug. 1) on Aug. 28, losing nearly 9% of its value the following day.

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However, a closer look will tell us that Dell’s recent drop isn’t justified. Let’s look at the reasons why.

Dell’s results were better than expected, and it also raised its guidance

Dell reported record revenue of $29.8 billion last quarter, an increase of 19% from the year-ago period. Meanwhile, its non-GAAP earnings rose identically to $2.32 per share. The numbers were ahead of consensus expectations, but its earnings guidance for the current quarter was lower than expected.

The company is expecting $2.45 per share in earnings in the current quarter, which is $0.10 lower than consensus expectations. Dell’s margins have taken a hit in recent quarters as the company has been ramping up the output of its artificial intelligence (AI) servers to meet the robust end-market demand. However, the good part is that the company is expecting its margins to improve as its AI server business scales up.

That’s the reason why Dell now expects its adjusted earnings to jump by 17% in fiscal 2026 to $9.55 per share, up from the earlier expectation of 15% growth. What’s more, the company has increased its revenue guidance by four percentage points to 12% to a midpoint of $107 billion. Investors, therefore, would do well to take a look at the bigger picture as the company is clearly benefiting from the rapidly growing demand for AI servers.

Dell points out that it shipped a record $8.2 billion worth of AI servers in the previous quarter. The company’s AI server revenue of $10 billion for the first half of fiscal 2026 has already exceeded the revenue it generated from this segment last year. Importantly, the demand for Dell’s AI servers remains solid as the company received fresh orders worth $5.6 billion last quarter.

It is now sitting on an AI server order backlog worth $11.7 billion. Dell expects to finish the year with $20 billion in AI server revenue. The updated forecast is a third higher than its prior expectation and would be double the AI server revenue it generated in the previous fiscal year.

Dell’s backlog suggests that it is indeed on track to meet its full-year AI revenue target, though don’t be surprised to see the company exceed that mark as the year progresses. That’s because the AI server market is expected to clock an annual growth rate of 34% through 2030, generating a whopping $837 billion in revenue at the end of the decade.

The company’s projected AI server revenue growth indicates that it is on track to grow at a faster pace than the end market. So, the company seems to be gaining more share of this lucrative space. That’s not surprising as Dell points out that it witnessed the largest expansion in its customer base last quarter. Moreover, it is increasingly converting its proof-of-concepts into full production deployments.

As a result, Dell could continue witnessing healthy growth in its revenue in the coming years given its ability to grow at a faster pace than the lucrative AI server market. At the same time, the company’s forecast that its AI margins will start improving from the second half of the year suggests that stronger earnings growth could be in the cards.

The stock could deliver outstanding gains

Dell’s 12-month price target of $150 as per 27 analysts covering the stock points toward a potential jump of 24% from current levels. But if we take a look at the stock’s valuation and its ability to deliver stronger earnings growth in the future, it could turn out to be a solid long-term winner. In fact, it is not surprising to see that analysts have increased their earnings growth expectations from Dell following its latest report.

DELL EPS Estimates for Current Fiscal Year data by YCharts

Assuming that the company can indeed clock $12.26 per share in earnings after a couple of years and trades at 29 times forward earnings at that time, in line with the tech-laden Nasdaq 100 index (using the index as a proxy for tech stocks), its stock price could hit $358. That’s nearly triple Dell’s current stock price.

Dell is currently trading at just 13 times forward earnings, indicating that it is substantially undervalued. That’s why investors looking for an AI stock that’s capable of clocking robust long-term growth and is trading at an attractive valuation can consider accumulating Dell, as it is in a solid position to capitalize on the tremendous growth of the AI server market.

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Geoffrey Hinton, a leading figure in the field of artificial intelligence (AI), has sounded an alarm about the technology’s potential for harm. The recent public frenzy over AI tools like ChatGPT has caused Hinton to shift from accelerating AI development to raising deep concerns about its future. He now believes that AI poses a grave threat to humanity, saying that the technology can help any person to create a nuclear bomb.Hinton described a chilling scenario where AI could enable an average person to create a bioweapon.“A normal person assisted by AI will soon be able to build bioweapons and that is terrible,” he said, adding, “Imagine if an average person in the street could make a nuclear bomb.”Hinton also discussed a range of topics, including the nuclear-level threats posed by AI, his own use of AI tools, and even how a chatbot played a role in his recent breakup.Recently, Hinton cautioned that AI could soon surpass human capabilities, including emotional manipulation. He suggested that AI’s ability to learn from vast datasets enables it to influence human feelings and behaviours more effectively than humans.

Hinton debates the definition of ‘Intelligence’

Hinton’s concern stems from his belief that AI is truly intelligent. He argued that, by any definition of the term, “AI is intelligent.” He used several analogies to explain that an AI’s experience of reality is not so different from a human’s.“It seems very obvious to me. If you talk to these things and ask them questions, it understands,” Hinton explained. “There’s very little doubt in the technical community that these things will get smarter,” he added.However, not everyone agrees with Hinton’s view. His former colleague and co-winner of the Turing Award, Yann LeCun, who is now the chief AI scientist at Meta, believes that large language models are limited and cannot meaningfully interact with the physical world.