Dell stock faces earnings test as AI rally draws SMCI watchers
Dell stock enters a pivotal earnings week alongside Hewlett Packard Enterprise, with both AI infrastructure names facing pressure to validate massive 2026 rallies. Dell reports fiscal Q2 results Tuesday as Wall Street expects nearly 50% revenue growth; traders also watch whether strong AI demand commentary could lift Super Micro Computer shares.
The AI server trade faces another major test this week as Dell Technologies and Hewlett Packard Enterprise deliver quarterly results, offering investors a fresh read on enterprise demand for AI infrastructure. According to Yahoo Finance, the reports arrive after DELL stock has surged 266% year to date while HPE has gained 120%, making execution and forward guidance critical for holders tracking net worth and wealth tied to tech equities.
Key Takeaways
- Dell reports fiscal Q2 Tuesday; HPE follows with fiscal Q3 results Wednesday.
- Wall Street expects Dell revenue near $44.48 billion and adjusted EPS of $4.93, roughly doubling year over year.
- Dell carried a record $51.3 billion AI-server backlog after Q1, with AI-optimized server revenue up 757% to $16.1 billion.
- HPE is expanding sovereign AI infrastructure, including next-generation Saudi Made servers.
- Super Micro Computer bulls hope strong sector commentary could support a potential rerating of the discounted SMCI stock.
Why is Dell stock in focus ahead of earnings?
Dell is set to report fiscal second-quarter results Tuesday, with analysts expecting revenue to increase nearly 50% to $44.48 billion and adjusted earnings to more than double to $4.93 a share. In the prior quarter, Dell reported a record $51.3 billion AI-server backlog, while AI-optimized server revenue soared 757% to $16.1 billion.
Demand has continued to exceed supply, with memory shortages emerging as a key constraint. That setup has powered the 266% rally in Dell stock this year. Investors will scrutinize commentary on AI orders, backlog conversion, margins, and customer demand.
UBS initiated coverage earlier this week with a Hold rating and a $480 price target, citing very strong demand tailwinds and execution at scale. Bank of America analysts said they expect Dell to raise its fiscal 2027 forecasts.
What does HPE need to prove this week?
HPE reports fiscal third-quarter earnings Wednesday, with analysts expecting revenue to surge 30% to $11.96 billion and adjusted EPS to more than double to $0.93, per Koyfin. HPE has been expanding its AI infrastructure footprint, most recently unveiling next-generation Saudi Made servers as it pushes further into sovereign AI and local data-center deployments.
As Bloomberg noted, artificial intelligence fever is powering Dell and HPE to their best years in the stock market. Yet with both manufacturers set to report over the next two days, investors are uncertain whether results can extend the rally further.
Why are SMCI bulls watching Dell and HPE closely?
The setup is particularly interesting for Super Micro Computer, a direct competitor. Last month, SMCI forecast fiscal 2027 revenue well above Wall Street expectations, while Q4 gross margins came in stronger than expected at 17.5%. Yet the stock remains deeply discounted, trading well below its 52-week high amid lingering governance and credibility concerns.
Sentiment took another hit earlier this year after U.S. authorities indicted one of the company's co-founders and several employees over alleged illegal server exports to China. While Super Micro has distanced itself from the allegations, analysts warn the controversy could create additional regulatory and business risks.
Strong AI demand commentary from Dell and HPE could bolster the case for a rerating of SMCI, traders said. On Stocktwits, retail sentiment was bearish for SMCI and bullish for HPE and DELL. In early premarket trading Tuesday, DELL gained 0.5%, HPE rose 0.8%, and SMCI was down 0.2%.