AI Server Stocks Retreat From Peak Gains
HPE and Dell shares pulled back Thursday as investors locked in profits following strong AI infrastructure results, while Super Micro held steady.
Hewlett Packard Enterprise shares declined 4% to $56.37 in Thursday morning trading, unwinding a two-day rally in AI server names without any new company disclosure. The stock remains up 134% year-to-date, a trajectory that often invites profit-taking. Dell Technologies followed suit, dropping 3% to $519.50 despite a 312% year-to-date gain. Super Micro Computer was largely insulated from the sell-off, slipping just 0.9% to $38.55.
The broader tech sector showed mild weakness, with the iShares U.S. Technology ETF down 0.7% and the Invesco QQQ Trust down 0.82%. According to GN stocks/nasdaq, the move reflects positioning dynamics rather than fundamental deterioration. Both HPE and Dell saw price appreciation in the prior two sessions after reporting robust AI infrastructure quarters, creating a setup where traders secured gains ahead of further valuation debates.
HPE and Dell Post Record AI Results
Hewlett Packard Enterprise reported fiscal Q3 2026 non-GAAP EPS of $1.11, beating the $0.9261 consensus, with revenue up 32.7% year-over-year to $12.21 billion. Networking revenue surged 74.9% to $2.89 billion. CEO Antonio Neri described AI as a multi-year growth driver. The company raised its FY2026 non-GAAP EPS guidance to $3.75–$3.85 and set a free cash flow target of at least $3.75 billion, with a FY2027 floor of $5 billion.
Dell Technologies posted Q2 FY2027 adjusted EPS of $7.04 against a $4.8994 estimate, with revenue rising 57.8% to $46.97 billion. The company recorded a record $60.9 billion in AI-optimized server orders and exited the quarter with a $95 billion AI backlog. Full-year FY2027 revenue guidance was raised to $192 billion, and non-GAAP EPS guidance increased to $25.50. Both firms cited supply constraints, including memory and clean-room capacity, as limiting factors on near-term growth.
Super Micro Diverges From Sector Trend
Super Micro’s relative stability stems from a different narrative. The stock had declined ahead of its August 11 fiscal Q4 2026 report, making Thursday’s flat price action a rebound rather than an unwind of gains. The company reported non-GAAP EPS of $1.70, well above the $0.9575 consensus, and revenue of $11.12 billion, up 93.2% year-over-year. GAAP gross margin expanded to 17.5% from 9.5% a year earlier.
Management guided Q1 FY2027 revenue to $14.5–$15.5 billion and full-year FY2027 revenue to $65–$72 billion. CEO Charles Liang noted over $60 billion in new orders during fiscal 2026. Super Micro’s full fiscal 2026 revenue reached $39.06 billion, up 77.8% year-over-year, with non-GAAP EPS of $3.63. The stock trades at a 12.36x P/E ratio, a valuation compression relative to peers that supports buying on dips.
Supply Constraints Shape Future Demand
HPE and Dell both stated that demand exceeds available supply, pointing to DDR5/DDR4 memory, NAND flash, and clean-room capacity as bottlenecks. Dell reiterated its supply-constrained status. This environment supports the pricing power of suppliers in power, cooling, and networking. The profit-taking observed in HPE and Dell is likely to be temporary, as the underlying demand for AI infrastructure remains robust and supply-side limitations continue to protect margins.
