North America Hardware & Storage: Raising Dell/HPE TPs on Increased CPU TAM, Continued AI-led Infrastructure Demand, and Networking Momentum

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North America Hardware & Storage: Raising Dell/HPE TPs on Increased CPU TAM, Continued AI-led Infrastructure Demand, and Networking Momentum

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24 Jul 2026 05:00:00 ET │ 25 pages

North America Hardware & Storage

Raising Dell/HPE TPs on Increased CPU TAM, Continued AI-led

Infrastructure Demand, and Networking Momentum

Asiya Merchant, CFA AC

CITI'S TAKE +1-415-951-1752

Following insights from AMD’s Analyst Day and Intel’s recent results, we are asiya.merchant@citi.com

raising our expectations for both Dell and HPE. Our conviction has

increased that enterprise IT infrastructure spending continues to

strengthen, supported by ongoing AI-related investments, server refresh

cycles, and broader demand for data center capacity. For Dell, we see

upside driven by a larger CPU total addressable market (TAM), robust server

demand, and continued strength in AI infrastructure deployments, which

support stronger growth. For HPE, our higher estimates reflect a larger CPU-

driven server opportunity and strong networking momentum. We maintain

our Buy ratings on both companies and open upside Catalyst Watches

into July qtr earnings report.

At Advancing AI AMD management raised its projected 2030 CPU TAM to $220

billion+, from its previous estimate of $120 billion, implying 50% CAGR and a

significantly larger long-term market opportunity driven by AI inference,

orchestration, and agentic workloads creating substantially more CPU demand than

previously expected. AI accelerator TAM of $1.4 trillion in 2030, representing 45%

CAGR+. Intel also reported 60% yy growth in DC segment and noted an increase in

general purpose server demand outlook, far outpacing supply.

We are raising our estimates and target price on Dell to reflect a larger CPU-driven

server opportunity.