Wells Fargo analysts have said that when computer hardware giants Dell (DELL) and Hewlett Packard Enterprise (HPE) report their upcoming earnings, the focus will be on how they’re making money from AI servers and expanding their backlog rather than on margin concerns. The investment firm kept Dell’s rating as Overweight but dropped its price target to $150 from $175. Meanwhile, HPE was kept at Equal Weight with a $22 price target.
Wells Fargo, led by five-star analyst Aaron Rakers, noticed that demand for AI servers is still strong, as shown by Super Micro’s (SMCI) revenue outlook, Taiwan Semiconductor’s (TSM) sales growth, and the need for High Bandwidth Memory. He thinks Dell and HPE will show positive AI server trends but is a bit worried about how profitable these servers will be.
Wells Fargo is also keeping an eye on Direct-Liquid Cooling (DLC), especially since Super Micro is leading in that space. It expects Dell and HPE to talk more about second-half 2024 trends rather than a big bounce back in traditional server sales.
It’s worth noting that, so far, Rakers has enjoyed a 64% success rate on his ratings, with an average return of 24.6% per rating.
In addition, HPE is expected to report earnings on August 27, while Dell will report on August 29.
DELL vs. HPE, Which Stock Is Better?
Turning to Wall Street, out of the two stocks mentioned above, analysts think that DELL stock has more room to run than HPE. In fact, DELL’s price target of $154.33 per share implies almost 50.65% upside versus HPE’s 17.14%.
