Goldman restarted coverage of several companies across the IT Hardware and Distribution sector, including Dell Technologies (DELL), Hewlett Packard Enterprise (HPE), TD Synnex (SNX), and Penguin Solutions (PENG), with a Buy rating.
Hewlett Packard, which previously had a Neutral rating, has a price target of $31 at Goldman.
The firm assumed coverage of HP (HPQ) with a Sell rating, down from Neutral, with a $21 price target. Super Micro Computer (SMCI) rating was also restarted at Sell with a $26 price target.
Goldman restarted coverage of Ingram Micro (INGM) at Neutral, which previously had a Buy rating.
The firm began coverage of NetApp (NTAP) with a Buy rating and a $128 price target.
The analysts said that after lackluster returns in 2025 (+4% year-over-year versus SPX +16%), they expect the backdrop in 2026 will remain choppy as the industry navigates oscillating market enthusiasm for AI, concerns around higher input costs (e.g., DRAM/NAND), and the ongoing cyclical refresh of traditional IT tech stacks.
The analysts noted that while they proceed with caution, they believe investors will be rewarded for a patient approach, with the sector ripe for stock picking, with a preference for names where they see upside to consensus estimates and which they believe screen attractively against three key investor debates into 2026: Firstly, how sustainable is AI demand? Secondly, where are we in the refresh cycles for PCs, servers, storage, and campus networking? And thirdly, how will higher input costs impact margins and demand?
Goldman recommended investors: Buy Dell Technologies (DELL) for an AI-exposed EPS compounder with an operating model that should be well positioned to navigate margin headwinds. Buy Hewlett Packard Enterprise (HPE) for business transformation with attractive upside. Buy NetApp (NTAP) for an EPS-compounder with an under-appreciated, high margin first-party public cloud offering. Buy TD Synnex (SNX) for a macro resilient distribution model with AI upside optionality from Hyve. Buy Penguin Solutions (PENG) for accelerating earnings growth from portfolio transformation.
The analysts noted that IT hardware stocks underperformed in 2025 as the industry navigated tariff headwinds, oscillating market enthusiasm for AI, and concerns around higher input costs. The analysts believe much of these headwinds will continue into 2026, informing their outlook for a mixed IT hardware demand environment.
On AI infrastructure demand, the analysts expect neocloud (GPU-as-a-service cloud computing) demand will remain strong, though product transitions and a widening XPU ecosystem may create some lumpiness from quarter to quarter. The analysts also expect to see continued traction in AI infrastructure investments at the enterprise and sovereign level, albeit still modest relative to neocloud.
On traditional servers and enterprise storage, Goldman is cautiously optimistic about revenue growth in 2026 driven by trends in data center modernization, though it will be monitoring the elasticity of demand against an inflated pricing environment, with the expectation that higher DRAM/NAND costs will be mostly passed along to customers.
On personal computers, or PCs, the analysts expect PC demand in 2026 will be weaker than the market is currently contemplating, driven by fading refresh tailwinds and higher pricing. The analysts anticipate the impact of higher input costs on margins and demand will be a key debate in 2026, and while it is still too early to assess the impact of price increases on the elasticity of demand, they believe there are opportunities to be selective on companies whose operating models and business mix are better positioned to navigate these headwinds.