Goldman Restarts Coverage on IT Hardware Firms, HP Target Cut to $21
- Rating Adjustments: Goldman restarted coverage on Dell Technologies (DELL), Hewlett Packard Enterprise (HPE), TD Synnex (SNX), and Penguin Solutions (PENG) with Buy ratings, while HP (HPQ) saw its price target cut to $21, indicating a cautious outlook on its future performance.
- Market Outlook: Analysts expect IT hardware demand to face challenges in 2026; while AI infrastructure demand remains strong, traditional PC and server markets may struggle due to high costs and weak demand, impacting overall industry performance.
- Investment Recommendations: Goldman advises investors to buy Dell Technologies (DELL) and Hewlett Packard Enterprise (HPE), with Dell seen as an AI-driven earnings grower and HPE showing attractive business transformation potential, while also recommending NetApp (NTAP) for its high-margin cloud service returns.
- Industry Dynamics: Despite underperformance in IT hardware stocks in 2025, Goldman believes there are selective investment opportunities in 2026, particularly as investors focus on AI demand sustainability and cost pressures, suggesting a patient approach for potential returns.
Trade with 70% Backtested Accuracy
Analyst Views on DELL
About DELL
About the author
Super Micro Computer Shares Surge 13.79% on Strong Q2 Results
- Strong Earnings Report: Super Micro Computer (SMCI) reported a remarkable 123% year-over-year revenue increase, driving its stock price up to $33.76, reflecting robust demand for AI infrastructure and boosting investor confidence.
- Upgraded Revenue Guidance: The company raised its full-year revenue guidance to at least $40 billion, indicating that AI-driven growth is sustainable, although ongoing margin pressures remain a concern for investors.
- Surge in Trading Volume: Trading volume reached 115 million shares, approximately four times the three-month average, highlighting strong market interest in Super Micro's growth potential.
- Impact of Competitive Pressures: Despite the impressive earnings, the company's gross margin declined compared to both the previous quarter and the same period last year, prompting investors to monitor how management will stabilize margins while maintaining growth.
The AI Hardware Market: A New Wave of Growth
SanDisk's Market Performance: SanDisk has seen a remarkable stock increase of over 700% in the past year, driven by strong demand for data storage solutions, particularly in the AI sector, following a significant earnings report.
Shift in AI Infrastructure: The market is transitioning from centralized AI training to localized AI inference, requiring high-performance hardware, which is leading to increased demand for original equipment manufacturers (OEMs) that build the necessary physical infrastructure.
Dell's Positioning: Dell Technologies is capitalizing on the growing demand for AI hardware, reporting a record backlog of $18.4 billion for its AI servers, indicating strong future revenue potential and a solid position in the commercial market.
HP's Strategic Moves: HP Inc. is undergoing restructuring to enhance efficiency and profitability, aiming to generate significant savings while also offering attractive dividends to investors, positioning itself favorably in the evolving AI landscape.
Bullish Investment Thesis on Dell Technologies Inc.
- Stock Performance: As of January 29, Dell Technologies' share price stood at $118.49, with a trailing P/E of 15.68, indicating the company's stability and attractiveness in the market, reflecting investor confidence in its long-term fundamentals.
- Options Trading Strategy: The investor sells 500 contracts of January 2028 $100 put options while the stock trades around $130, choosing a strike price approximately 23% below the current market level, which signals a bullish-to-neutral outlook on Dell's future performance while allowing room for short-term volatility.
- Risk Management: If Dell's stock remains above $100 at expiration, the options expire worthless, allowing the investor to retain the full premium, effectively lowering the cost basis by about $17 per share, transforming potential downturns into advantageous entry points, showcasing a disciplined value-investing approach.
- Market Positioning: Dell's strong positioning in the AI infrastructure buildout, particularly in AI-optimized servers and storage, alongside its established PC and enterprise hardware businesses, creates a durable floor under the stock, demonstrating the company's competitive strength in future markets.
Five MarketRank™ Stocks Endorsed by Analysts and Major Institutions
Market Trends: Investors are shifting focus from speculative growth to fundamental values, emphasizing quality and durability in their investments, particularly in the context of a choppy market environment.
Ally Financial Performance: Ally Financial has evolved into a leading digital banking corporation, reporting strong earnings and a significant market capitalization, while maintaining a low overhead structure that enhances competitiveness.
Delta Airlines Strategy: Delta Airlines has redefined its brand by focusing on premium service offerings and diversifying revenue streams, positioning itself as a key player in the airline industry despite some recent lagging performance.
Marvell Technology's Role: Marvell Technology is addressing the challenges of data movement in AI infrastructure, specializing in high-speed networking and custom silicon solutions, while maintaining a strong market position despite recent stock performance fluctuations.
Delaware Supreme Court Cuts Tesla Legal Fees Significantly
- Legal Fee Reduction: The Delaware Supreme Court reduced Tesla's legal fees from $176.1 million to $70.9 million in a shareholder lawsuit, ruling that the lower court overvalued the settlement, which directly impacts Tesla's financial obligations.
- Directors' Compensation Return: Tesla's board agreed to return approximately $277 million in cash and stock options to the company, reflecting a commitment to shareholder interests and potentially improving corporate governance, thereby enhancing investor confidence.
- Settlement Value Assessment: Shareholder attorneys indicated that the total settlement value is $919 million, and the court's ruling will influence future assessments of settlement amounts in similar cases, possibly leading to stricter standards for fee calculations.
- Executive Compensation Controversy: Elon Musk successfully defended his 2018 compensation package in a separate case, with the Delaware Supreme Court overturning a prior ruling, indicating the legality and reasonableness of executive pay, which may have far-reaching implications for the company's future compensation policies.
Coinbase Joins TrumpAccounts Initiative to Boost Financial Literacy
- Support for Trump Initiative: Coinbase CEO Brian Armstrong announced the company's participation in the TrumpAccounts initiative, pledging to match a $1,000 contribution for eligible employee children, emphasizing the importance of early investments in financial security and literacy for kids.
- Wealth Growth Potential: Under the TrumpAccounts program, American babies born between 2025 and 2028 will receive a $1,000 government contribution, which will be automatically invested in U.S. companies, expected to grow in value over time, aiding in wealth building for children.
- Tax Challenges: While the government's initial contribution and charitable donations are secure, parental contributions currently lack a crucial exemption from federal gift tax laws, which may affect parents' willingness to invest and the long-term growth of the accounts.
- Stock Price Dynamics: Coinbase shares fell 0.66% to $209.43 during Wednesday's regular trading session and dropped another 0.29% in after-hours trading, indicating a weak price trend in the short term and reflecting market caution regarding its future performance.
Super Micro Computer Shares Surge 13.79% on Strong Q2 Results
- Strong Earnings Report: Super Micro Computer (SMCI) reported a remarkable 123% year-over-year revenue increase, driving its stock price up to $33.76, reflecting robust demand for AI infrastructure and boosting investor confidence.
- Upgraded Revenue Guidance: The company raised its full-year revenue guidance to at least $40 billion, indicating that AI-driven growth is sustainable, although ongoing margin pressures remain a concern for investors.
- Surge in Trading Volume: Trading volume reached 115 million shares, approximately four times the three-month average, highlighting strong market interest in Super Micro's growth potential.
- Impact of Competitive Pressures: Despite the impressive earnings, the company's gross margin declined compared to both the previous quarter and the same period last year, prompting investors to monitor how management will stabilize margins while maintaining growth.
The AI Hardware Market: A New Wave of Growth
SanDisk's Market Performance: SanDisk has seen a remarkable stock increase of over 700% in the past year, driven by strong demand for data storage solutions, particularly in the AI sector, following a significant earnings report.
Shift in AI Infrastructure: The market is transitioning from centralized AI training to localized AI inference, requiring high-performance hardware, which is leading to increased demand for original equipment manufacturers (OEMs) that build the necessary physical infrastructure.
Dell's Positioning: Dell Technologies is capitalizing on the growing demand for AI hardware, reporting a record backlog of $18.4 billion for its AI servers, indicating strong future revenue potential and a solid position in the commercial market.
HP's Strategic Moves: HP Inc. is undergoing restructuring to enhance efficiency and profitability, aiming to generate significant savings while also offering attractive dividends to investors, positioning itself favorably in the evolving AI landscape.
Bullish Investment Thesis on Dell Technologies Inc.
- Stock Performance: As of January 29, Dell Technologies' share price stood at $118.49, with a trailing P/E of 15.68, indicating the company's stability and attractiveness in the market, reflecting investor confidence in its long-term fundamentals.
- Options Trading Strategy: The investor sells 500 contracts of January 2028 $100 put options while the stock trades around $130, choosing a strike price approximately 23% below the current market level, which signals a bullish-to-neutral outlook on Dell's future performance while allowing room for short-term volatility.
- Risk Management: If Dell's stock remains above $100 at expiration, the options expire worthless, allowing the investor to retain the full premium, effectively lowering the cost basis by about $17 per share, transforming potential downturns into advantageous entry points, showcasing a disciplined value-investing approach.
- Market Positioning: Dell's strong positioning in the AI infrastructure buildout, particularly in AI-optimized servers and storage, alongside its established PC and enterprise hardware businesses, creates a durable floor under the stock, demonstrating the company's competitive strength in future markets.
Five MarketRank™ Stocks Endorsed by Analysts and Major Institutions
Market Trends: Investors are shifting focus from speculative growth to fundamental values, emphasizing quality and durability in their investments, particularly in the context of a choppy market environment.
Ally Financial Performance: Ally Financial has evolved into a leading digital banking corporation, reporting strong earnings and a significant market capitalization, while maintaining a low overhead structure that enhances competitiveness.
Delta Airlines Strategy: Delta Airlines has redefined its brand by focusing on premium service offerings and diversifying revenue streams, positioning itself as a key player in the airline industry despite some recent lagging performance.
Marvell Technology's Role: Marvell Technology is addressing the challenges of data movement in AI infrastructure, specializing in high-speed networking and custom silicon solutions, while maintaining a strong market position despite recent stock performance fluctuations.
Delaware Supreme Court Cuts Tesla Legal Fees Significantly
- Legal Fee Reduction: The Delaware Supreme Court reduced Tesla's legal fees from $176.1 million to $70.9 million in a shareholder lawsuit, ruling that the lower court overvalued the settlement, which directly impacts Tesla's financial obligations.
- Directors' Compensation Return: Tesla's board agreed to return approximately $277 million in cash and stock options to the company, reflecting a commitment to shareholder interests and potentially improving corporate governance, thereby enhancing investor confidence.
- Settlement Value Assessment: Shareholder attorneys indicated that the total settlement value is $919 million, and the court's ruling will influence future assessments of settlement amounts in similar cases, possibly leading to stricter standards for fee calculations.
- Executive Compensation Controversy: Elon Musk successfully defended his 2018 compensation package in a separate case, with the Delaware Supreme Court overturning a prior ruling, indicating the legality and reasonableness of executive pay, which may have far-reaching implications for the company's future compensation policies.
Coinbase Joins TrumpAccounts Initiative to Boost Financial Literacy
- Support for Trump Initiative: Coinbase CEO Brian Armstrong announced the company's participation in the TrumpAccounts initiative, pledging to match a $1,000 contribution for eligible employee children, emphasizing the importance of early investments in financial security and literacy for kids.
- Wealth Growth Potential: Under the TrumpAccounts program, American babies born between 2025 and 2028 will receive a $1,000 government contribution, which will be automatically invested in U.S. companies, expected to grow in value over time, aiding in wealth building for children.
- Tax Challenges: While the government's initial contribution and charitable donations are secure, parental contributions currently lack a crucial exemption from federal gift tax laws, which may affect parents' willingness to invest and the long-term growth of the accounts.
- Stock Price Dynamics: Coinbase shares fell 0.66% to $209.43 during Wednesday's regular trading session and dropped another 0.29% in after-hours trading, indicating a weak price trend in the short term and reflecting market caution regarding its future performance.
