Dell and HPE Lead S&P 500 as Oracle Earnings Reignite AI Infrastructure Optimism

Shares of Dell Technologies and Hewlett Packard Enterprise led the S&P 500’s gains on Friday, driven by renewed investor confidence in data-center expenditures following Oracle’s latest earnings report. Oracle reported a 30% increase in revenue alongside an expanding backlog for its artificial intelligence cloud services, signaling to the market that AI investment remains strong and directly convertible into top-line growth.

Brian Mulberry, chief market strategist at Zacks Investment Management, highlighted that these developments provided a significant tailwind for hardware suppliers. He pointed to Dell’s recent earnings, which revealed that its AI server business accumulated $60.9 billion in orders with a total backlog reaching $95 billion. According to Mulberry, accelerating demand for traditional and AI servers, as well as networking and storage equipment, is benefiting both companies, with Dell holding a distinct advantage in large-scale AI server orders while HPE leverages its broad enterprise infrastructure portfolio.

Market data from Dow Jones showed HPE’s stock surging 12.4% to set an all-time closing high, while Dell shares climbed 12% to also record a historic close. RBC Capital Markets analyst David Paige initiated coverage of Dell with an outperform rating on Thursday, citing the company’s end-to-end portfolio across compute, storage, and servers, along with its supply chain efficiency, as key factors for continued market share gains in AI infrastructure.

Despite the bullish sentiment, analysts warned that macroeconomic factors could soon influence valuations. Ryan Lee, senior vice president of product and strategy at Direxion, noted that while cloud providers’ strong results typically boost hardware makers, the broader tech sector is currently sensitive to oil prices and the upcoming Federal Reserve policy meeting. There is a prevailing expectation that the central bank may raise interest rates next week.

Lee cautioned that higher borrowing costs tend to weigh heavily on large-cap companies, regardless of their strong fundamentals. “Even the big dogs won’t be able to escape a higher-rate environment,” he said. Investors are now looking ahead to the Fed’s decision, the geopolitical tensions between the U.S. and Iran affecting oil markets, and the November midterm elections. While AI spending has proven remarkably sticky so far, Lee concluded that the extent to which hardware suppliers like Dell and HPE continue to benefit will largely depend on the trajectory of interest rates.