Networking and hardware poised for gains, Evercore flags top stocks to own

Investing.com -- Hardware and networking stocks are well-positioned heading into earnings season, Evercore ISI said, flagging Dell as its top pick and arguing that resilient demand and higher average selling prices are likely to drive upside across much of its coverage.

In a note previewing April-quarter results from Dell, HP Inc., Hewlett Packard Enterprise and NetApp, Evercore ISI said it believes "AI infrastructure and networking demand remain among the most durable areas of spend," supported by higher capital expenditure from hyperscalers and neoclouds alongside continued enterprise investment in campus networking refreshes and data center modernization.

Evercore ISI sees Dell and HPE as “well positioned to report upside and raise their full-year guidance.”

For Dell, the firm cited potential upside to AI server revenues from incremental neocloud and enterprise AI spending. For HPE, networking upside across Aruba and Juniper was flagged as a key driver.

On personal computers, the firm noted that near-term trends remain positive, with IDC reporting approximately 3% year-on-year growth in shipments, and said higher average selling prices should act as an additional tailwind.

For storage vendors Xerox and NetApp, Evercore ISI said near-term enterprise spending remains solid, though gross margin pressure from memory-related costs is a concern. Evercore noted that storage vendors have raised pricing by more than 40% since the start of 2026, which it said could drive upside to revenue and gross profit dollar estimates.

The key debate for the second half, Evercore said, centers on price elasticity and "what happens to demand in H2, especially as further waves of price increases are passed through."

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