Dell and HPE shares rise in the US after Oracle earnings report
In the United States, shares of server equipment manufacturers Dell Technologies and Hewlett Packard Enterprise became the top gainers in the S&P 500 on Friday following Oracle's financial report. Oracle's results reinforced investor expectations of continued spending on data centers and artificial intelligence infrastructure, MarketWatch reports.
HPE shares gained 12.4% and closed at a record level. Dell securities rose 12%, also setting a closing record, according to Dow Jones Market Data.
Signal from Oracle
Oracle reported 30% revenue growth and an expansion of its order book for artificial intelligence cloud services. Brian Mulberry, chief market strategist at Zacks Investment Management, said these figures demonstrated the resilience of AI spending and its ability to translate into revenue.
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Mulberry also drew attention to Dell's recent report: orders for its AI servers reached $60.9 billion, while the company's order book grew to $95 billion. In his assessment, Dell has greater exposure to large orders for AI servers, while HPE's strengths are its broad range of networking solutions and enterprise infrastructure.
The role of Fed rates
RBC Capital Markets analyst David Paige on Thursday initiated coverage of Dell shares with an outperform rating. He noted that the company's broad portfolio—from computing systems and personal computers to data storage systems and servers—together with its customer base, supply chain, and flexible consumption options enables it to increase its share of the AI infrastructure market.
Ryan Lee, senior vice president of products and strategy at Direxion, believes that strong results from cloud providers such as Oracle support equipment manufacturers involved in building data centers. At the same time, the further performance of technology stocks will depend on oil prices and the US Federal Reserve's decision on interest rates, he said. If borrowing costs rise, the market's reaction to shares of large companies linked to artificial intelligence may be less favorable, Lee noted.
