Shares of Dell Technologies and Hewlett Packard Enterprise advanced in premarket trading on Wednesday, following a bullish preliminary earnings update from Super Micro Computer that underscored sustained demand for artificial intelligence computing infrastructure.
Super Micro, a key supplier of AI servers and related hardware, raised its revenue forecast for the September quarter to a range of $18.5 billion to $19.5 billion, up from its prior guidance of $14.5 billion to $15.5 billion. The midpoint of the revised range implies year-over-year growth of roughly 279%. The company also projected gross margin between 12% and 12.5%, compared with its earlier forecast of 10.4% to 10.8%.
The stronger-than-expected outlook lifted sentiment across the AI hardware complex. Dell shares gained nearly 5% in premarket action, while HPE rose about 4%. Super Micro's own stock surged more than 12%.
Evercore ISI analyst Amit Daryanani called the gross margin projection "an impressive feat" for Super Micro, noting that rival Dell has historically commanded a pricing premium in AI servers. "We view the update as a positive data point for AI compute demand," Daryanani wrote in a client note, adding that the combination of revenue upside and better-than-expected margins bodes well for Dell and HPE.
The rally comes after a strong run for both companies this year. Dell shares have climbed roughly 267% in 2026, while HPE has advanced about 134%, based on Tuesday's closing prices. However, both stocks have recently pulled back as investors question whether enterprise AI spending can justify elevated valuations. Dell has fallen about 19% over the past five trading sessions, while HPE has declined approximately 18.5%.
Last week, Barclays downgraded its ratings on Dell, HPE, and NetApp, citing uncertainty about the timing of enterprise AI adoption. Analyst Tim Long lowered Dell to Equal Weight from Overweight and cut his price target to $574 from $603, though the revised target still implies upside of around 24% from Tuesday's close. The Barclays team noted that they had not seen a "meaningful AI inflection" in enterprise spending for these companies, attributing much of the recent revenue strength to higher memory costs.
"There is growing sentiment about enterprise AI adoption creating a hardware refresh," the Barclays analysts wrote, adding that businesses typically allocate just 5% of their IT budgets to AI. "We believe the strong enterprise revenues are more of a function of memory costs than a move to enterprise AI at this time."
Despite the cautious stance, analyst sentiment remains broadly positive. According to the Wall Street Journal's analyst data, 18 of 33 analysts covering Dell have Buy ratings, four have Overweight ratings, and 10 have Hold ratings, with no Sell ratings. The average price target stands at $599.69. For HPE, 13 of 27 analysts have Buy ratings, 11 have Hold ratings, and three have Overweight ratings, with an average price target of $73.05, implying potential upside of around 30%.
Investors are now awaiting Super Micro's full earnings report, scheduled for November 3, to gain more clarity on the sources of demand and the sustainability of its improved performance. Daryanani noted that questions remain over how much of the September-quarter business came from major cloud companies versus newer cloud infrastructure providers such as CoreWeave and SpaceX.
This article is for informational purposes only and does not constitute financial advice.
