Dell Technologies and HP Enterprise stocks were surging on Wednesday after fellow server maker Super Micro Computer's earnings boosted Wall Street's confidence about companies in the artificial intelligence infrastructure business.
Super Micro announced Tuesday night that fiscal fourth-quarter gross margins are expected to be in the range of 15% to 17%, which would be double the 8.2% to 8.4% the company had previously expected.
Wedbush analyst Matt Bryson wrote in a note Tuesday night that he believes the reason for such a massive margin jump is that demand for AI powered servers continues to be incredibly high, and there's just not enough supply to meet customer's needs. That gives Super Micro pricing power.
"We believe SMCI likely was able to take advantage of scarcity to more favorably price products and/or shift customers to a richer mix of servers," Bryson wrote. He rates Super Micro as Neutral with a $34 price target.
Super Micro stock was soaring 25% to $31.78 and was on pace for its largest percentage increase since Dec. 2, 2024, according to Dow Jones Market Data.
Other server stocks were following suit. Dell shares were up 10% to $445.39 while HPE shares were rising 5.6% to $49.35.
"If our supposition around the basis for SMCI's preannouncement is correct, we believe Dell, HPE, Gigabyte, etc. should all benefit from similar dynamics," Bryson wrote.
Dell and HPE stocks have surged 253% and 105% this year, respectively, as investors bet that there will continue to be incredibly strong demand for AI powered servers. Super Micro's preliminary financial results provided Wall Street with even more confidence that will be the case.
Write to Angela Palumbo at angela.palumbo@dowjones.com
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(END) Dow Jones Newswires
July 22, 2026 12:51 ET (16:51 GMT)
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