Hardware & Networking Thoughts into Hardware EPS: Strong Near-Term Demand to Offset Margin Headwinds and Overwhelm Concerns; Favor DELL and HPE

Research evidence excerpt

Hardware & Networking Thoughts into Hardware EPS: Strong Near-Term Demand to Offset Margin Headwinds and Overwhelm Concerns; Favor DELL and HPE

J P M O R G A N North America Equity Research

15 May 2026

Hardware & Networking

Thoughts into Hardware EPS: Strong Near-Term

Demand to Offset Margin Headwinds and Overwhelm

Concerns; Favor DELL and HPE

The reversal of the memory related concerns for the IT Hardware group has fed into IT Hardware/ Telecom & Networking

strong share price rises across the group, with the group of IT Hardware companies Equipment

referenced in the report up 50% from trough levels earlier this year. While part of Samik Chatterjee, CFA AC

the reversal in bearishness has been led by moderating, although still strong, (1-212) 622-0798

increase in memory prices on a sequential basis, also contributing to the reversal samik.x.chatterjee@jpmorgan.com

is the increasing moderation of concerns around a slower Enterprise spending Joseph Cardoso

backdrop in the second half of this calendar year - which was earlier the base case (1-212) 622-9036

for investors following the pull-forward in 1H26. Pull-forwards providing a joseph.cardoso@jpmchase.com

tailwind to near-term revenue drivers is undeniable; however, the likelihood of Manmohanpreet Singh

(1-212) 622-4527

price elasticity leading to pull-backs in 2H26 looks quite less likely now with manmohanpreet.singh@jpmchase.com

Enterprise customers preparing for a prolonged period of memory-led inflation

Marc Vitenzon

and likely pulling forward demand into 2026 from the out-years, rather than merely (1-212) 622-3342

from 2H26. In financial terms, we believe the sharp rises in the share prices are marc.vitenzon@jpmchase.com