2 Technology Stocks Could Beat Earnings as Dell and Applied Materials Draw Fresh Investor Attention
2 Technology Stocks Could Beat Earnings as Dell and Applied Materials Draw Fresh Investor Attention
Dell Technologies and Applied Materials are back on investors’ radar after Zacks highlighted both computer and technology stocks as possible earnings-beat candidates. The report points to positive Earnings ESP readings for both companies, with Dell Technologies showing an Earnings ESP of +3.51% and Applied Materials showing +2.66%. Zacks notes that this metric can help identify companies where analysts may be raising near-term expectations before earnings announcements.
Why Earnings ESP Matters
The Zacks Earnings ESP, or Expected Surprise Prediction, compares the most accurate analyst estimate with the broader consensus estimate. A positive figure can suggest that newer analyst revisions are slightly more optimistic than the main consensus. This does not guarantee an earnings beat, but it can signal improving sentiment before a quarterly report.
For investors, earnings season is often a key moment. A company may report strong revenue, higher profit, better margins, or improved guidance. Any of these can influence market reaction. However, stock prices can also fall even after a company beats estimates if guidance disappoints or expectations were already too high.
Dell Technologies: AI Servers Remain the Main Growth Story
Dell Technologies has become closely tied to the artificial intelligence infrastructure boom. In its fiscal 2026 fourth-quarter report, Dell announced record full-year revenue of $113.5 billion, up 19% year over year. The company also reported record non-GAAP diluted EPS of $10.30, up 27%.
The strongest driver was Dell’s Infrastructure Solutions Group. The company said full-year ISG revenue reached $60.8 billion, up 40% year over year, while fourth-quarter ISG revenue jumped 73% to $19.6 billion. Dell also reported $64 billion in AI-optimized server orders for the year and entered fiscal 2027 with a $43 billion AI server backlog.
These numbers explain why investors are watching Dell closely. Demand for AI servers, data-center systems, storage, and enterprise infrastructure remains high as companies build out AI workloads. Dell’s position in servers gives it a direct connection to that trend.
What Could Help Dell Beat Expectations?
Dell may benefit if AI server shipments remain strong, if enterprise customers continue upgrading infrastructure, and if margins hold up despite component-cost pressure. The company’s previous results showed strong cash generation, including record full-year cash flow from operations of $11.2 billion.
Still, risks remain. AI server demand can be uneven, supply chains may tighten, and profit margins can be affected by memory and component costs. For that reason, an earnings beat would likely need both strong sales and a confident outlook.
Applied Materials: Semiconductor Equipment Demand Stays Strong
Applied Materials is another technology name drawing attention. The company is a major supplier of materials engineering solutions used in semiconductor and advanced display manufacturing. Applied Materials reported fiscal second-quarter 2026 revenue of $7.91 billion, up 11% year over year, and record non-GAAP EPS of $2.86, up 20%.
The company also posted GAAP gross margin of 49.9% and non-GAAP gross margin of 50.0%, showing strong profitability. Its results were supported by continued demand for semiconductor manufacturing tools, especially as AI chips require more advanced production processes.
Why Applied Materials Is Important to the AI Supply Chain
AI growth depends not only on chip designers, but also on the companies that help manufacture advanced chips. Applied Materials provides equipment and technology used by chipmakers to build smaller, faster, and more efficient semiconductors.
Reuters reported that Applied Materials issued a stronger-than-expected third-quarter outlook, with revenue guidance around $8.95 billion, plus or minus $500 million. The company also guided for adjusted profit of about $3.36 per share, plus or minus $0.20, supported by AI and data-center infrastructure spending.
Market Context: AI Still Leads the Technology Narrative
The common theme between Dell and Applied Materials is artificial intelligence. Dell is exposed through servers and infrastructure. Applied Materials is exposed through the equipment needed to manufacture advanced chips. Together, they represent two different layers of the AI supply chain.
That makes both companies important to watch during earnings season. Investors are looking for proof that AI-related demand is not only strong, but also profitable and sustainable. Revenue growth alone may not be enough. Margins, backlog, guidance, and customer demand will also matter.
What Investors Should Watch Next
For Dell, the key questions are whether AI server orders continue to convert into revenue, whether traditional servers and storage remain stable, and whether management can protect margins. For Applied Materials, the focus is on wafer fabrication equipment demand, advanced packaging, customer spending plans, and guidance for the next quarter.
Both stocks may be positioned for positive earnings surprises based on Zacks’ Earnings ESP readings, but investors should treat those signals as research tools, not guarantees. Earnings reports can be unpredictable, and market reactions often depend on future guidance as much as past results.
Conclusion
Dell Technologies and Applied Materials are attracting attention because both sit near the center of the AI infrastructure story. Dell benefits from demand for AI servers and enterprise systems, while Applied Materials benefits from rising investment in semiconductor manufacturing. With positive Earnings ESP readings, both companies may have a better chance of beating expectations, but careful investors should still review earnings, guidance, valuation, and risk before making any decision.
Disclaimer: This article is for news and educational purposes only. It is not financial advice or a recommendation to buy or sell any stock.
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