Dell Technologies shares dipped in premarket trading after Piper Sandler analysts issued a concerning to mixed outlook for the company's upcoming earnings report. The firm highlighted challenges stemming from rising component costs and Dell's cost-plus pricing model, which analysts say creates a tougher earnings setup than many competitors.

While acknowledging Dell's strong execution in AI servers, Piper Sandler's team led by James Fish noted the overall calendar year 2026 setup remains concerning to mixed. The analysts expect potential growth acceleration above 30% for the quarter with a possible 1-2% beat based on current inputs, but warn of significant risks to gross and operating margins. For fiscal year 2027, revenue is projected to start around $120 billion amid ongoing margin pressure concerns.

The broader tech sector showed more positive signals, with Piper Sandler's off-calendar checks indicating strength for companies like Rubrik, Pure Storage, Zoom, Nutanix, and Cisco. However, Dell's hardware pricing trends face headwinds as DRAM price changes have slowed while NAND prices accelerated through February. Despite the risks, analysts noted Dell is seeing net-positive momentum heading into calendar year 2026, leaving the stock in a mixed position ahead of earnings.