The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how hardware & infrastructure stocks fared in Q2, starting with Diebold Nixdorf (NYSE: DBD).
The Hardware & Infrastructure sector will be buoyed by demand related to AI adoption, cloud computing expansion, and the need for more efficient data storage and processing solutions. Companies with tech offerings such as servers, switches, and storage solutions are well-positioned in our new hybrid working and IT world. On the other hand, headwinds include ongoing supply chain disruptions, rising component costs, and intensifying competition from cloud-native and hyperscale providers reducing reliance on traditional hardware. Additionally, regulatory scrutiny over data sovereignty, cybersecurity standards, and environmental sustainability in hardware manufacturing could increase compliance costs.
The 9 hardware & infrastructure stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 3.8% while next quarter’s revenue guidance was in line.
Luckily, hardware & infrastructure stocks have performed well with share prices up 14.8% on average since the latest earnings results.
Diebold Nixdorf (NYSE: DBD)
With roots dating back to 1859 and a presence in over 100 countries, Diebold Nixdorf (NYSE: DBD) provides automated self-service technology, software, and services that help banks and retailers digitize their customer transactions.
Diebold Nixdorf reported revenues of $915.2 million, down 2.6% year on year. This print exceeded analysts’ expectations by 3.3%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ EPS estimates.
Diebold Nixdorf delivered the slowest revenue growth of the whole group. Interestingly, the stock is up 1.6% since reporting and currently trades at $57.20.
Read our full report on Diebold Nixdorf here, it’s free for active Edge members.
Best Q2: Pure Storage (NYSE: PSTG)
Founded in 2009 as a pioneer in enterprise all-flash storage technology, Pure Storage (NYSE: PSTG) provides all-flash data storage hardware and software that helps organizations manage their data more efficiently across on-premises and cloud environments.
Pure Storage reported revenues of $861 million, up 12.7% year on year, outperforming analysts’ expectations by 1.7%. The business had an exceptional quarter with a solid beat of analysts’ billings estimates and revenue guidance for next quarter exceeding analysts’ expectations.
The market seems happy with the results as the stock is up 51.1% since reporting. It currently trades at $92.01.
Is now the time to buy Pure Storage? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q2: Super Micro (NASDAQ: SMCI)
Founded in Silicon Valley in 1993 and known for its modular "building block" approach to server design, Super Micro Computer (NASDAQ: SMCI) designs and manufactures high-performance, energy-efficient server and storage systems for data centers, cloud computing, AI, and edge computing applications.
Super Micro reported revenues of $5.76 billion, up 7.5% year on year, falling short of analysts’ expectations by 4.2%. It was a softer quarter as it posted revenue guidance for next quarter missing analysts’ expectations significantly and a significant miss of analysts’ revenue estimates.
Super Micro delivered the highest full-year guidance raise but had the weakest performance against analyst estimates in the group. As expected, the stock is down 6.2% since the results and currently trades at $53.77.
Read our full analysis of Super Micro’s results here.
NetApp (NASDAQ: NTAP)
Founded in 1992 as a pioneer in networked storage technology, NetApp (NASDAQ: NTAP) provides data storage and management solutions that help organizations store, protect, and optimize their data across on-premises data centers and public clouds.
NetApp reported revenues of $1.56 billion, up 1.2% year on year. This print beat analysts’ expectations by 0.9%. Taking a step back, it was a satisfactory quarter as it also produced an impressive beat of analysts’ billings estimates but full-year revenue guidance meeting analysts’ expectations.
The stock is up 8.8% since reporting and currently trades at $122.
Read our full, actionable report on NetApp here, it’s free for active Edge members.
Dell (NYSE: DELL)
Founded by Michael Dell in his University of Texas dorm room in 1984 with just $1,000, Dell Technologies (NYSE: DELL) provides hardware, software, and services that help organizations build their IT infrastructure, manage cloud environments, and enable digital transformation.
Dell reported revenues of $29.78 billion, up 19% year on year. This result topped analysts’ expectations by 1.9%. Overall, it was a strong quarter as it also put up revenue guidance for next quarter exceeding analysts’ expectations and a decent beat of analysts’ revenue estimates.
Dell had the weakest full-year guidance update among its peers. The stock is up 11.2% since reporting and currently trades at $149.58.
Read our full, actionable report on Dell here, it’s free for active Edge members.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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