Asiya Merchant

Asiya Merchant with Citigroup asked for incremental color on the attach rates Dell is seeing with its AI server shipments, specifically if there's a better attach rate than previously observed and what other products or services are being attached.

Answer

Jeff Clarke identified three distinct groups for attach items with AI servers: storage, networking, and services. He noted increased storage attach with enterprise customers and continued growth in the networking business. Services, including installation, deployment, and break-fix, are a significant differentiator for Dell, providing unmatched capability in deploying complex systems, maintaining high uptimes, and offering on-site support with Dell-badged employees. Dell is optimistic about continued growth and acceptance of these attach services in FY27.

Asiya Merchant asked for incremental color on the attach rate seen with AI server shipments and what other products or services can be attached to these AI servers.

Answer

Jeff Clarke, Vice Chairman and Chief Operating Officer, Dell Technologies, identified three distinct groups for AI server attach items: storage (especially with enterprise momentum), networking (business continues to grow), and services (installation, deployment, break-fix). He emphasized Dell's differentiated capabilities in deploying complex customer solutions, unmatched uptimes, and on-site support as key drivers for continued growth and acceptance of these attach services in FY27.

Asiya Merchant from Citigroup asked for an update on the hyperscaler opportunity, specifically regarding progress beyond the first hyperscaler announcement with the new structured model, and the nature of investments being made to explore these opportunities, whether product-related or for expansion.

Answer

Charlie Giancarlo, Chairman and CEO, stated that Everpure is currently in engineering test environments with multiple hyperscalers, and these engagements are progressing well. However, he noted that it takes time to achieve certification and confirm specific build-out dates. Rob Lee, Chief Technology and Growth Officer, added that investments are primarily focused on R&D to support hyperscaler growth and scaling the supply chain.

Asiya Merchant asked where HP feels most confident in achieving share gains, specifically in which segments and regions for both Personal Systems (PCs) and Print. She also inquired about the outlook for operating expenses (OpEx) for the remainder of the year, particularly how previously announced cost-saving actions are flowing through the first quarter results.

Answer

Karen Parkhill, HP Inc.'s Chief Financial Officer, stated that in Print, HP is gaining share in Big Tanks in developed markets and in supplies, maintaining its leadership position. Ketan Patel, President of Personal Systems, added that in calendar Q4, HP gained value share across all key geographies and regions, specifically highlighting a 1.6-point year-on-year increase in premium share and a 1.8-point year-on-year increase in AI PC share, aligning with HP's strategy to prioritize high-value categories. Karen Parkhill noted that OpEx for FY 2026 is expected to be roughly flat year-over-year in dollars, driven by expense reductions to offset investments. She mentioned the AI enablement transformation program, targeting $1 billion in gross run rate savings by FY 2028, with $300 million by the end of FY 2026, and a focus on accelerating this program and driving additional cost actions.

Asiya Merchant asked where HP feels most confident in achieving share gains, specifically in certain segments or regions for both PCs and print. She also inquired about the OpEx outlook for the remainder of the year, considering the cost-saving actions announced last quarter and their flow-through into Q1 results.

Answer

Karen Parkhill, CFO, stated that HP is gaining share in print in Big Tanks in developed markets and in supplies, maintaining its leadership position. Ketan Patel, President of Personal Systems, highlighted value share gains across all key geographies and regions in calendar Q4, emphasizing a focus on premium share (up 1.6 points year-on-year) and AI PC share (up 1.8 points year-on-year). Bruce Broussard, Interim CEO, added that HP is prioritizing these categories. Karen Parkhill, CFO, expects OpEx for FY26 to be roughly flat year-over-year in dollars, driven by expense reductions to offset investments. She reiterated the goal of $1 billion in gross run rate savings by FY28, with $300 million by the end of FY26, and a focus on accelerating this program and driving additional cost actions.

Asiya Merchant asked if component availability and supply constraints were limiting the $40 billion guidance and how DCBBS's ramp would impact various geographies given recent declines in some regions.

Answer

Charles Liang (CEO) confirmed the $40 billion guidance already accounts for component shortages, suggesting revenue could be higher if supply improves. He emphasized DCBBS's global appeal, attracting customers across all regions due to its 'one-stop shop' benefits for data center construction.

Asiya Merchant inquired if the minimum $40 billion revenue guidance is constrained by component availability and supply issues, suggesting it could be higher if supply wasn't an issue. She also asked about the ramp of DCBBS across various geographies, given some regional revenue declines.

Answer

CEO Charles Liang confirmed that the $40 billion guidance already considers component supply growth, and revenue could exceed this if supply improves quickly. He noted that DCBBS is gaining global traction, with customers in almost every region appreciating its ability to simplify and speed up data center builds, making its impact global.

Asiya Merchant asked about SanDisk's outlook for the edge market (PCs, smartphones) and consumer market, considering memory allocation and potential unit declines, and how customer signals are shaping the demand outlook through late 2026 and into 2027. She also asked Luis Visoso about his perspective on true cycle gross margins given the current structural dynamics.

Answer

David Goeckeler (Chairman and CEO) expressed satisfaction with the consumer portfolio, noting over 50% year-over-year growth driven by branding and innovation. For edge markets, he acknowledged potential unit declines in 2026 due to base effects but highlighted strong customer demand signals and natural market dynamics of configuration changes with pricing. He emphasized SanDisk's broad market presence and the transformative impact of AI deployments making data center the largest NAND market, validating past R&D and capital investments. Luis Visoso (EVP and CFO) stated that 35% gross margin is not the target for a high CapEx/R&D industry, highlighting the current 51% and next quarter's 66% guidance as progress towards justifying investments and indicating a structurally higher margin expectation.

Asiya Merchant asked for SanDisk's perspective on the edge market (PCs, smartphones) and consumer market, specifically regarding customer demand signals through late 2026 and into 2027, given memory allocation and potential unit declines. She also inquired about SanDisk's outlook on true cycle gross margins in light of the structural changes in the NAND industry.

Answer

CEO David Goeckeler expressed satisfaction with the consumer portfolio's performance, noting over 50% year-over-year growth, driven by brand and innovation. He acknowledged potential base effects from unit declines in PC/smartphone markets but highlighted strong customer signals for supply. David emphasized the value of SanDisk's broad market presence and how AI deployments are fundamentally changing industry dynamics, leading to greater recognition of the company's IP and investment. CFO Luis Visoso stated that 35% gross margin is not the target for a high CapEx/R&D industry. He noted the current quarter's 51% gross margin and the 66% guidance for Q3 indicate progress towards justifying R&D and capital investments, aiming for structurally higher margins.

Asiya Merchant asked about the CapEx outlook for 2026, given the strong order book momentum and AI growth, and how Amphenol plans its investments.

Answer

Craig Lampo (CFO) stated that 2025 CapEx was slightly over 4% of sales, at the upper end of their historic 3-4% range. He expects 2026 CapEx to remain in that 3-4% range, likely towards the upper end, reflecting the organization's discipline in supporting significant growth with reasonable spending.

Asiya Merchant followed up on Amphenol's CapEx outlook and investment plans for 2026, given the strong order book momentum and AI growth.

Answer

CFO Craig Lampo noted that 2025 CapEx was slightly above the historic 3-4% range, ending just over 4%. He expects 2026 CapEx to remain within the 3-4% range, likely towards the upper end (around 4%), reflecting disciplined spending despite significant growth opportunities and strong orders.