AI Server Stocks Rally as Last Week’s Selloff Reverses: Super Micro Jumps 4%, Hewlett Packard Enterprise Climbs 3%, Dell Edges Higher
After last week's brutal selloff wiped out Hewlett Packard Enterprise's worst week on record, AI server stocks are staging a sharp morning reversal, and whether this bounce holds depends on a debate over memory prices, margins, and a brand-new finance…
AI server makers are bouncing back together after a sharp hardware selloff last week. Super Micro Computer (NASDAQ:SMCI | SMCI Price Prediction) stock is up 4% to $32.87 in morning trading, leading the group. Meanwhile, Hewlett Packard Enterprise (NYSE:HPE) stock is up 3% to $57.01, just behind Super Micro Computer stock.
Dell Technologies (NYSE:DELL) stock is up 2% to $462.64, though Hewlett Packard Enterprise stock rose more. For a broader read on tech, the iShares U.S. Technology ETF (NYSEARCA:IYW) is up 1.59%. Alongside it, the Invesco QQQ Trust (NASDAQ:QQQ) is up 1.55%, putting AI hardware at the front of a broader tech rebound.
Last week’s slide in Dell and Hewlett Packard Enterprise stock followed a Barclays report that downgraded both companies to Equal Weight on valuation. The Barclays report highlighted possible server and storage pressure as memory prices normalize.
Shares of Dell led a broad data center selloff last Wednesday, with Super Micro Computer stock slipping alongside it. Hewlett Packard Enterprise stock went on to log its worst week ever.
Super Micro Names a New Finance Chief
Super Micro Computer named Mark Long, who previously led finance at a major storage maker, as its chief financial officer last week, replacing David Weigand. The appointment lands as Super Micro Computer scales a business that builds rack-scale AI servers on thin margins.
In its Q4 FY2026 report, Super Micro Computer posted revenue of $11.12 billion, up 93.2% year over year, slightly missing the $11.56 billion estimate. Founder Charles Liang spoke on the earnings call. He described the shortfall as “purely a timing story,” citing short-term customer delays tied to power, cooling and networking.
A better enterprise customer mix lifted Super Micro Computer’s GAAP gross margin to 17.5% from 9.5% a year earlier. Even so, the company guided Q1 FY2027 gross margin to just 10.4% to 10.8%, a reminder of how thin its AI server economics can run.
For Mark Long, cash generation is central to his new role at Super Micro Computer. During Q4, the company produced $722 million of free cash flow while its inventory rose to $12.9 billion ahead of expected FY2027 growth. With its $7.5 billion in cash and net debt down to $1.2 billion, the company enters Long’s tenure with more balance-sheet room than it had a quarter earlier.
Super Micro’s Cash Flow Test
Super Micro Computer now faces a key question: can its new finance chief steady the company’s cash flow. Its FY2027 guidance calls for revenue of $65 billion to $72 billion after more than $60 billion in new orders during FY2026, and funding that growth could keep its working capital stretched. On the August earnings call, Liang asserted, “The demand for our AI IT solutions is even stronger than ever before.”
Whether Super Micro Computer’s inventory begins converting into cash as its record backlog ships is worth tracking. Dell and Hewlett Packard Enterprise stock remain tied to last week’s Barclays debate over valuation and memory prices.
A sharp bounce in Super Micro Computer, Dell and Hewlett Packard Enterprise stock could fade quickly if last week’s worries return. The server names sit alongside the power, cooling, and networking suppliers we profiled in a free AI infrastructure report, available here. Position sizes should stay modest until the AI server selloff ends.
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David Moadel is financial writer specializing in stocks, ETFs, options, precious metals, and Bitcoin. David has written well over 1,000 articles for leading online publications, helping investors understand markets, income strategies, and risk.His work has appeared in The Motley Fool, InvestorPlace, U.S. News & World Report, TipRanks, ValueWalk, Benzinga, Market Realist, TalkMarkets, Finmasters, 24/7 Wall St., and others.With a master’s degree in education, David has taught at the elementary, high school, and college levels. That teaching background shapes his writing style: clear, educational, and practical. David has also built a loyal social-media audience by providing trustworthy financial content on YouTube, X/Twitter, and StockTwits.
