Goldman Sachs has resumed coverage of multiple companies in the IT hardware and distribution sectors.
According to Zhitong Finance, Goldman Sachs has resumed coverage of multiple companies in the IT hardware and distribution sector. Specifically, the firm assigned a 'Buy' rating to Dell Technologies (DELL.US), Hewlett Packard Enterprise (HPE.US), Synnex Corporation (SNX.US), and Penguin Solutions (PENG.US), with a price target of $31 for Hewlett Packard Enterprise. A 'Sell' rating was assigned to HP Inc (HPQ.US) and Super Micro Computer (SMCI.US), with price targets of $21 and $26, respectively. INGRAM MICRO INC (INGM.US) was given a 'Neutral' rating, downgraded from a previous 'Buy'. NetApp (NTAP.US) received an initial 'Buy' rating with a price target of $128.
The analysts noted that after experiencing lackluster returns in 2025, with only a 4% increase compared to a 16% rise in the S&P 500 Index, the IT hardware and distribution industry is expected to remain volatile into 2026 as it navigates fluctuations in AI market enthusiasm, concerns over rising input costs (such as DRAM/NAND), and ongoing cyclical updates to traditional IT technology stacks.
While analysts expressed caution, they believe patient investors will be rewarded, as the industry now offers conditions suitable for stock selection. They favor stocks with upside potential in consensus forecasts and those that are attractive across three key investor themes in 2026: First, what is the sustainability of AI demand? Second, at what stage are the refresh cycles for PCs, servers, storage, and campus networks? Third, how will higher input costs impact margins and demand?
Analysts explained their rationale for assigning 'Buy' ratings to Dell Technologies, Hewlett Packard Enterprise, Synnex Corporation, Penguin Solutions, and NetApp. Dell Technologies, as an AI-related compound earnings per share growth stock, has an operating model well-positioned to handle margin pressures. Hewlett Packard Enterprise offers attractive upside due to its business transformation. NetApp, also a compound earnings per share growth stock, owns an undervalued high-margin first-party public cloud business. Synnex Corporation benefits from a macroeconomic resilient distribution model and provides AI upside options through Hyve. Penguin Solutions is poised for accelerated profit growth through portfolio transformation.
Regarding AI infrastructure demand, analysts expect strong demand for new cloud services (GPU-as-a-Service computing) despite potential quarter-to-quarter volatility caused by product transitions and the expanding XPU ecosystem. Analysts also anticipate continued growth in AI infrastructure investments at both corporate and national levels, though such growth remains modest compared to new cloud adoption.
For traditional servers and enterprise storage, analysts are cautiously optimistic about revenue growth driven by data center modernization trends in 2026 but will closely monitor demand resilience amid inflationary pricing environments. They expect most of the increased DRAM/NAND costs to be passed on to customers.
In the PC segment, analysts forecast weaker-than-expected demand in 2026 due to waning upgrade drivers and rising prices. The impact of rising input costs on margins and demand is expected to be a key issue in 2026. Although it is too early to assess the impact of price increases on demand elasticity, there may be opportunities for selective investment in companies with operating models and business structures better positioned to withstand these headwinds.
