Super Micro, Dell and HPE have been red-hot stocks this week. What's behind the big moves.

By Emily Bary

Server makers could benefit from a possible easing of memory pressures and renewed interest in central processing units

Dell's stock is up more than 16% so far this week.

Server stocks have been some of the hottest in the S&P 500 so far this week, and an analyst sees three potential drivers of the market momentum.

One is that there's been increasing investor interest in all things tied to central processing units. While graphics processing units dominated the early wave of artificial-intelligence workloads, CPUs are now deemed to be essential for AI computing tasks.

"We're seeing a growing investor view that CPU-driven server demand may be more resilient than previously expected, driven both by general enterprise-server refresh but also the need for CPUs around AI infrastructure where they're required to orchestrate workloads, manage data movement and handle pre/post-processing tasks," Evercore ISI analyst Amit Daryanani wrote in a note to clients on Wednesday.

That view seems supported by recent commentary from Arm Holdings' (ARM) investor day held late on Tuesday, Daryanani added. The chip designer's bullish expectations "reinforced the importance of heterogeneous compute in AI systems, where CPUs remain a critical complement to accelerators."

Don't miss: Arm's stock shoots toward best day in a year as an Nvidia-like chapter may be starting

Hewlett Packard Enterprise's stock (HPE) rose about 8% on Wednesday and is up around 20% for the week. Dell Technologies' stock (DELL) was up 4% on the day and is up more than 16% for the week. And Super Micro Computer's stock (SMCI) bounced higher as well, up 8.2% in Wednesday action and up more than 17% on a week-to-date basis. HPE's weekly performance leads the S&P 500 SPX, and all three rank within the top five best-performing stocks.

Shares of Super Micro fell sharply late last week after a company co-founder was indicted for alleged participation in a scheme that diverted $2.5 billion of company servers to China in violation of export-control rules.

While Super Micro itself wasn't named in the lawsuit, analysts have worried that the company might lose business in the wake of the scandal. Daryanani said that "investors are increasingly viewing Dell, and to a lesser extent HPE, as potential beneficiaries of any reallocation of Nvidia supply."

That said, Super Micro's strong stock rally this week suggests investors think the company could also benefit from secular trends in the server market, such as the rise of CPUs and a potential easing of memory pressures.

Daryanani wrote Wednesday that original-equipment makers in general have won favor lately, while memory stocks have moved lower. He pointed to Google's recent announcement of a breakthrough algorithm that it said reduces memory usage while boosting the performance of its AI models.

"The market may be beginning to price in a more favorable cost/supply backdrop for OEMs, as any stabilization in memory pricing and supply would reduce a key overhang on hardware profitability," he said.

See more: Micron's stock is dropping. Is Google partly to blame?

-Emily Bary

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03-25-26 1702ET