16 March 2026 Price Target Change Asia Tech Hardware Asia Tech Hardware: model updates across the AI supply chain; Delta remains our top pick Alex Wang, CFA +852 2123 2613 alex.wang@bernsteinsg.com Shirley Yang, CFA +852 2123 2660 shirley.yang@bernsteinsg.com Ethan Xu +852 2123 2634 ethan.xu@bernsteinsg.com YTD2026, tech hardware investors have favored AI plays with price hike narratives (e.g. substrate), or strong new technologies ramps expanding TAM (e.g. CPO). Following 4Q25 results, we updated our model ...

Core Viewpoint - Super Micro Computer (SMCI) has faced significant challenges in recent years, including missed reporting deadlines and self-created issues, impacting its operational performance [1] Group 1: Company Performance - SMCI is recognized as a maker of AI servers, indicating its involvement in a rapidly growing sector [1] - The company has experienced operational difficulties that have affected its credibility and performance metrics [1] Group 2: Market Position - SMCI operates in a competitive landscape alongside other major players in the AI server market, such as NVIDIA (NVDA) and Dell (DELL) [1]

17 March 2026 | 6:21PM EDT Equity Research Americas Technology: Hardware: Data center & campus equipment 4Q25 market share and outlook update BOTTOM LINE: We update our industry networking and server models to reflect the latest available 4Q25 data from 650 Group. 650 Group upgraded its outlooks for the AI data center switching & AI server market, with (a) the AI data center switching market now expected to reach ~$87 bn by 2030 at a 51% 2025-2030 CAGR (v. $84 bn on prior 3Q25 forecast) on raised 2026-2030 ...

Core Insights - Dell Technologies is significantly outperforming HP in the AI sector, with nearly $10 billion in AI server revenue for FY2025 and a forecast of at least $15 billion for FY2026, while HP's printing segment is declining [1][2][4] - Dell's total revenue for FY2025 reached $95.6 billion, marking an 8% increase, and its earnings grew by 45.4% year over year, contrasting with HP's operating income decline of 16.87% [1][6][7] Growth Trajectory - Dell's AI server business is experiencing robust growth, with a backlog of approximately $9 billion as of February [2][6] - HP's Personal Systems revenue grew by 11% year over year in Q1 FY2026, driven by AI PC sales, but its printing segment has seen a consistent decline [7] Valuation - HP has a trailing P/E of 7x and a forward P/E of 7x, while Dell's trailing P/E is 17x and forward P/E is 12x, indicating a higher valuation for Dell due to its growth prospects [8][9] - HP's price-to-sales ratio is 0.31x compared to Dell's 0.90x, reflecting the structural risks associated with HP's business model [8][9] Yield and Income - HP offers a higher dividend yield of 6.2% with a quarterly dividend of $0.30 per share, while Dell's yield is 1.4% with an annual dividend of $2.52 per share, which was raised by 20% [11] - Despite HP's higher yield, it is accompanied by declining profitability and rising cost pressures [11][12] Long-Term Track Record - Over the past year, Dell shares have appreciated by 63.62% and by 246.71% over five years, while HP shares have decreased by 34.25% in the past year and by 38.61% over five years [13] - This divergence highlights the fundamentally different strategic positions of the two companies in the current market environment [13][14]

2026 TMT Conference Recap: Key Takeaways Industry Overview - **Industry**: IT Hardware in North America - **Event**: 2026 TMT Conference - **Focus**: Opportunities and challenges in the IT hardware sector, particularly related to AI and memory pricing dynamics Core Themes 1. **AI Capital Expenditure (Capex) Confidence** - Strong confidence in the ramp-up of AI-related capital expenditures, with over $730 billion expected from the top 10 global cloud spenders in 2026, representing a 60%+ year-over-year increase [4][8] - Companies like STX and WDC are highlighted for their robust demand signals from hyperscalers, with expectations of 25%+ nearline earnings before tax growth [8] 2. **Memory Pricing Concerns** - Significant concerns regarding the impact of memory prices on demand and pricing elasticity, with expectations of a material increase in memory prices throughout the year [9][10] - Companies expressed cautious optimism about mitigating higher input costs through various strategies, although there is uncertainty regarding visibility in the second half of the year [9] 3. **Stock Dislocations** - Recent stock price volatility has created opportunities for selective stock picking within the IT hardware sector, with a focus on companies that can manage supply chain challenges and pricing power effectively [18][20] 4. **AI Initiatives for Spending Efficiency** - More than half of the companies reported leveraging AI to enhance cost efficiency and productivity, indicating a shift from proof-of-concept projects to production-level implementations [17] Company-Specific Insights - **STX/WDC**: Rated as 'most favored' Overweights, with strong demand from data centers and attractive valuations at 11-13x CY27 EPS, which are 30-40% above consensus [8][18] - **DELL**: Despite being Underweight-rated, management's guidance of $50 billion in AI server sales for FY27 (+100% year-over-year) is noteworthy, supported by a $43 billion backlog [8] - **IBM**: Addressed concerns about AI disruption, suggesting that it could present opportunities rather than risks [16] - **TDC**: Highlighted growth in free cash flow driven by AI initiatives [16] Additional Observations - **Cost Efficiency**: Companies are increasingly embedding AI into supply chain systems and software development to drive productivity gains and lower operational costs [17] - **Market Dynamics**: The IT hardware sector is experiencing a dynamic environment with elevated supply chain risks and geopolitical volatility impacting overall market conditions [3] - **Memory Price Trends**: DRAM and NAND contract prices are expected to rise significantly, with DRAM prices projected to increase by 110-115% in Q1 2026 and another 20-25% in Q2 2026 [10] Conclusion - The 2026 TMT Conference underscored a complex landscape for the IT hardware industry, characterized by strong opportunities in AI spending, significant challenges related to memory pricing, and a dynamic stock-picking environment. Companies that can navigate these challenges while capitalizing on AI initiatives are likely to emerge as leaders in the sector [3][18]

Core Viewpoint - Dell Technologies Inc. (DELL) stock is approaching bargain territory due to robust AI server demand, a growing backlog, and favorable valuation metrics [1] Group 1: Company Performance - The demand for AI servers is strong, contributing to Dell's increasing backlog [1] - The valuation of Dell Technologies is considered attractive, indicating potential for investment [1] Group 2: Analyst Background - The analysis is conducted by a full-time investor with a focus on the tech sector and a strong academic background in finance [1] - The analyst emphasizes core values of excellence, integrity, transparency, and respect as essential for long-term success [1]

Group 1 - The core focus is on Dell's AI server momentum and its potential impact on the company's headline numbers [1]

Core Insights - Dell Technologies Inc's stock increased by 17% to $142.32 following strong fourth-quarter earnings and revenue that surpassed analyst expectations, with adjusted earnings at $3.89 per share and revenue at $33.38 billion [1] - The company's fiscal guidance for 2027 has more than doubled, driven primarily by AI server revenue amid growing data center demand [1] Stock Performance - Seven brokerages have raised their price targets for Dell, with Raymond James providing the highest increase from $166 to $182 [2] - The stock is breaking out of consolidation and is now 31% higher year-over-year, aiming for its highest close since November 10 [2] Short Interest and Trading Dynamics - Short interest in Dell has risen by nearly 6%, with 27.45 million shares sold short, accounting for 8.9% of the total available float, indicating potential for a short squeeze [3] - At the current trading pace, it would take shorts almost four trading days to cover their positions [3] Options Market Activity - Options traders have shown bearish sentiment, with a 10-day put/call volume ratio of 1.22, ranking higher than 92% of readings from the past year [4] - The stock's Schaeffer's put/call open interest ratio (SOIR) of 1.16 is in the 88th percentile of its annual range, suggesting that unwinding these bearish bets could provide additional support [4] Shift in Options Trading - There has been a notable shift towards call options, with 53,000 calls traded in the first hour, which is 11 times the average intraday amount and nearly double the number of puts [5] - The most popular option is the weekly 2/27 130-strike call [5]

The technology company recorded a 39% jump in sales, driven in part by growth in its AI server business, and anticipates growth will continue into the new fiscal year. ...

Group 1 - The company recorded a 39% increase in sales, attributed in part to growth in its AI server business [1] - The company anticipates that growth will continue into the new fiscal year [1]