Piper Sandler: Dell a beneficiary of the upcoming datacenter refresh

Investing.com -- Piper Sandler analysts initiated coverage on Dell Technologies (NYSE: DELL) with an Overweight rating and a $172 price target, while starting Hewlett Packard Enterprise (NYSE: HPE) at Neutral with a $24 target, citing contrasting strengths and execution risks between the two enterprise hardware players.

In a note to clients, Piper Sandler said Dell “should be one of the primary beneficiaries” of the upcoming enterprise datacenter refresh cycle, which “looks particularly strong for 2026.”

The firm highlighted the AI infrastructure buildout and the approaching Windows 10 end-of-life as additional catalysts, noting that “~50% of units still need to be refreshed.”

The analysts wrote that Dell’s shares are “up ~3.5x since November 2022 as it is viewed as an AI beneficiary,” adding that about 45% of its server business is now AI-related.

However, Piper Sandler cautioned that Dell faces “a secular headwind in the shift towards cloud by enterprises” and potential market share losses in PCs.

For HPE, Piper Sandler acknowledged positives such as the 2026 hardware refresh, AI growth, and synergies from the Juniper Networks deal, but said execution risks and weak historical performance weigh on the outlook.

“We appreciate HPE’s opportunities around refresh coming up in 2026,” the firm wrote, adding that past execution and the lack of margin uplift have weighed on investor sentiment.

Piper Sandler expects AI-systems to account for around 35% of HPE’s product revenue by 2028, but concluded that “we prefer other names” given ongoing share losses and slower progress in its GreenLake as-a-Service transition.

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