By Angela Palumbo

HP Inc.'s stronger-than-expected demand for personal computers could be a good omen for Dell Technologies, which reports earnings after the stock market closes Thursday.

HP reported financial results for its fiscal third-quarter after the market close on Wednesday. Earnings for the quarter were in-line with analyst estimates, while revenue came in above expectations.

"Despite fears of a PC demand slow-down owing to a tariff related pull-in last quarter, HP reported solid [revenue]," UBS analyst David Vogt wrote in a note. He raised his price target on HP to $29 from $26 and maintained a Neutral rating on the stock.

Shares of HP rose 2.8% to $27.87 on Thursday.

President Donald Trump has implemented tariffs in what he says is a bid to bring manufacturing back to the U.S. However, some tech hardware is exempt from the highest tariffs as Section 232 investigations into electronic products continue. Those investigations allow the U.S. government to look into whether imports of certain products are a threat to national security.

Even though HP PCs aren't affected by tariffs, there's a concern that consumers' purchasing power will suffer from the general increase of goods prices from higher import taxes. But so far, that hasn't happened yet.

HP CEO Enrique Lores told Barron's on Wednesday that HP believes the back-to-school season is "starting strong," which helped demand.

Also, Microsoft's Windows 10 operating system ends in October. When that happens, technical assistance and software updates will no longer be provided on Windows 10 systems, unless customers pay per device. Not only has this helped incentivize purchases of new PCs, but HP says that only about 50% of the installed base has been converted to Windows 11, leaving more room for upgrades in the months ahead.

This could all be a good sign for PC maker Dell.

Analysts surveyed by FactSet expect Dell to report second-quarter adjusted earnings of $2.29 a share on revenue of $29 billion.

Dell reports revenue for both its Client Solutions Group, which includes PCs and other commercial hardware, and its Infrastructure Solutions Group, which includes servers that help power artificial intelligence.

Analysts expect Dell to report revenue of $12.87 billion for its Client Solutions Group, which would be a 3.7% increase from the same period last year.

Wall Street will also be paying close attention to Dell's server demand for the quarter, as artificial-intelligence infrastructure investments remain a key focus for investors. Analysts expect Infrastructure Solutions Group revenue of $15.64 billion, a 34% jump from last year.

"Our supply chain checks suggest that AI server order momentum remains strong," BofA Securities analyst Wamsi Mohan wrote in a note on Aug. 15. He forecasts AI server revenue of $20.7 billion in the fiscal year 2026, above Dell's current guidance of more than $15 billion, he added.

He rates Dell as a Buy with a $165 price target.

Shares of Dell were up 0.5% to $133.12 Thursday. The stock has gained 16% this year.

Write to Angela Palumbo at angela.palumbo@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

August 28, 2025 12:37 ET (16:37 GMT)

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