Dell's stunning 33% stock rally gave a big boost to shares of other server makers

By Britney Nguyen

Dell's blowout earnings report is highlighting how the AI buildout is also driving demand for old-school computing

Dell's stock was headed for a record high on Friday.

Shares of Dell Technologies rocketed higher Friday, following a stellar earnings report that echoed the strengthening opportunity for traditional computing in the artificial-intelligence buildout.

The current agentic AI wave and shift to inference, or running AI models after training, has put the spotlight back on central processing units, and Dell's results - AI-server revenue saw a nearly ninefold jump from a year earlier - show that it's "capitalizing on a new refresh opportunity on the horizon," Wedbush analyst Dan Ives wrote in a note to clients.

And investors are betting that if Dell can do it, so can its competitors, as shares of other server makers were also soaring. But that took some attention away from other recently hot AI-adjacent stocks, such as those of companies in the optical-networking business.

Dell's stock (DELL) soared 32.8% Friday - a record rally for a single day - after already hitting four straight record closes through Thursday. It has powered up 101.4% in May, to smash the previous record monthly gain of 29.4% that was set in February.

That gave a nice boost to other server makers, reflecting investor enthusiasm for AI-related opportunities outside of chips that have strong growth potential.

See more: Marvell's stock has more room to rally after 'exceptional' AI demand drives a stronger growth outlook.

Hewlett Packard Enterprise's stock (HPE) climbed 12.6% to a second straight all-time closing high. The stock's May gain broke the previous monthly record rally of 33.6% in March 2016.

Shares of Super Micro Computer (SMCI) surged 11.6%, and posted their best month since January 2024, according to Dow Jones Market Data.

And IBM's stock (IBM) leaped 12.7% on Friday, to post a monthly gain of 28.9%, its best since the record 35.4% rally in October 2002.

While there is some concern that Dell's results reflect a pull-forward of demand as customers look to get ahead of a run-up in prices for components across the AI industry, J.P. Morgan analyst Samik Chatterjee believes Dell's "robust pipeline/backlog across the board increases confidence into limited likelihood of pullbacks this year."

In contrast, shares optical companies were pulling back after a red-hot start to the year. Lumentum Holdings shares (LITE) slipped 0.7%, Corning's stock (GLW) lost 0.8% and Coherent's stock dropped 4.1%. Ciena shares (CIEN) ended Friday with a 1.8% gain, to reverse an intraday decline of as much as 5.4% seen just before midday. Still, shares of Lumentum, Corning and Ciena have more than doubled so far in 2026, while Coherent's have advanced 95.8%.

Read: Optical stocks are booming. Here's how to invest in one of the most explosive areas of tech.

-Britney Nguyen

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

(END) Dow Jones Newswires

05-29-26 1700ET