Wall Street Sees More Upside for Dell and HPE

Key Points

• Dell Technologies and Hewlett-Packard Enterprise got upgraded post-earnings, yet shares haven't risen much.
• The divergence in price action and Wall Street target changes suggests there is opportunity in these stocks.
• Wall Street sees overall upside north of 15% in both names, as their AI businesses continue growing.

Two stocks that are curious cases in tech after recent earnings are Dell Technologies NYSE: DELL and Hewlett-Packard Enterprise NYSE: HPE. As of the June 10 close, Dell and HPE are up 0.5% and 3.5%, respectively, since releasing their results. However, Wall Street price target changes suggest these moves should have been much larger. This divergence in realized price action versus Wall Street targets suggests that there could be room for these names to run.

Below is a breakdown of the shifts in Wall Street expectations and the developments these companies saw last quarter.

Wall Street Price Target Changes Suggest Upside Is Ahead for Dell and HPE

Since May 29, the average price target from analyst updates tracked by MarketBeat for Dell has increased by 5%. Additionally, compared to the stock’s June 10 closing price, this average price target of just under $134 implies upside of 18%. 

For HPE, forecast updates increasingly differ from its price trends. Since June 4, MarketBeat tracked an average price target increase of 15% for HPE. This average price target of just over $21 implies upside in shares of nearly 16% versus their June 10 closing price.

The changes in targets indicate that Dell and HPE should have risen more after their earnings. Additionally, analysts still see a solid amount of overall upside for these names over the next 12 months. So, what happened business-wise for Dell and HPE last quarter, and what reasoning do analysts put behind their increased expectations?

Dell’s Record AI Orders Lift Analysts' Spirits

Overall, Dell grew revenues by 5% in its fiscal Q1 2026 and increased adjusted earnings per share (EPS) by 17% from the prior year quarter. Dell beat sales estimates, but it missed adjusted EPS figures. This may explain why the stock didn’t rise after the results. The company continued to make progress, boosting operating profitability, with its adjusted operating margin rising 50 basis points from a year ago. 

Dell also reaffirmed its full-year guidance. Although this normally wouldn’t be a positive development, it is, given the current economic and trade uncertainties.

A big reason for this is that demand for Dell’s AI servers just reached record-breaking levels. In fiscal Q1, AI-server orders came in at $12.1 billion, around $1 billion more than the company had throughout all of fiscal 2025.

This helped push the company’s backlog, a measure of orders received but not filled, to $14.4 billion. Dell expects to ship more than $15 billion worth of AI servers in fiscal 2026. This massive uptick in AI server orders was a big reason that analysts at JPMorgan substantially increased their price target.

Despite lowering their target slightly, analysts at UBS believe Dell’s current share price “presents a favorable risk/reward scenario,” as the company’s supply chain remains resilient. However, Dell will need to ramp up shipments of its AI servers significantly to please markets going forward.

HPE Sees Improving Server Profitability Going Forward, AI Backlog Recovery Continues

HPE revenues grew by 7% on a constant currency basis, solidly ahead of expectations. Adjusted EPS declined by 10%, but was notably better than forecasts. The company raised the lower end of its revenue growth and EPS guidance for the whole year, a positive sign.

Regarding AI-systems orders, the company’s revenues and backlog increased by $100 million to $1 billion and $3.2 billion, respectively. 

Although these are not the eye-popping numbers that Dell put up, this is a good sign for HPE. The company’s AI backlog plummeted in fiscal Q4 2024. So, seeing another quarter of this figure recovering is important to the company’s outlook.

Additionally, HPE expects margins within its server segment to recover to 10% from their current level of 5.9%. Loop Capital noted this expected improvement in its upgrade, as HPE has effectively addressed pricing and inventory issues. UBS also raised its price target on HPE, but highlighted the relatively small size of its AI business relative to Dell as a concern.

It suggests that Dell may have a superior competitive advantage. However, others believe that HPE’s focus on improving AI system profitability is the right move, although it may be putting a cap on growth.

Overall, Wall Street seems to believe the market underappreciates Dell and HPE. These companies play an important role in the AI infrastructure value chain, combining components to make the servers that ultimately get used in data centers.