Wrapping up Q3 earnings, we look at the numbers and key takeaways for the hardware & infrastructure stocks, including IonQ (NYSE: IONQ) and its peers.

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 strong Q3. As a group, revenues beat analysts’ consensus estimates by 3.6% while next quarter’s revenue guidance was in line.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 8.5% since the latest earnings results.

Best Q3: IonQ (NYSE: IONQ)

Founded by quantum physics pioneers from the University of Maryland and Duke University in 2015, IonQ (NYSE: IONQ) develops quantum computers that process information using trapped ions to solve complex computational problems beyond the capabilities of traditional computers.

IonQ reported revenues of $39.87 million, up 222% year on year. This print exceeded analysts’ expectations by 47.8%. Overall, it was an incredible quarter for the company with a beat of analysts’ EPS and revenue estimates.

IonQ pulled off the biggest analyst estimates beat and fastest revenue growth of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 6.4% since reporting and currently trades at $51.89.

Is now the time to buy IonQ? Access our full analysis of the earnings results 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 $27.01 billion, up 10.8% year on year, in line with analysts’ expectations. The business had an exceptional quarter with a solid beat of analysts’ EPS guidance for next quarter estimates and revenue guidance for next quarter exceeding analysts’ expectations.

Dell scored the highest full-year guidance raise among its peers. The market seems content with the results as the stock is up 1.2% since reporting. It currently trades at $127.64.

Is now the time to buy Dell? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: HP (NYSE: HPQ)

Born from the legendary Silicon Valley garage startup founded by Bill Hewlett and Dave Packard in 1939, HP (NYSE: HPQ) designs and sells personal computers, printers, and related technology products and services to consumers, businesses, and enterprises worldwide.

HP reported revenues of $14.64 billion, up 4.2% year on year, exceeding analysts’ expectations by 0.7%. Still, it was a slower quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates and a slight miss of analysts’ EPS guidance for next quarter estimates.

As expected, the stock is down 5.6% since the results and currently trades at $22.92.

Read our full analysis of HP’s results here.

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 $945.2 million, up 2% year on year. This number beat analysts’ expectations by 0.8%. It was a very strong quarter as it also put up a beat of analysts’ EPS estimates and a narrow beat of analysts’ revenue estimates.

The stock is up 21.4% since reporting and currently trades at $68.29.

Read our full, actionable report on Diebold Nixdorf here, it’s free for active Edge members.

Xerox (NASDAQ: XRX)

Pioneering the modern office copier and inventing technologies like Ethernet and the laser printer, Xerox (NASDAQ: XRX) provides document management systems, printing technology, and workplace solutions to businesses of all sizes across the globe.

Xerox reported revenues of $1.96 billion, up 28.3% year on year. This print lagged analysts' expectations by 3.2%. More broadly, it was a satisfactory quarter as it also recorded a beat of analysts’ EPS estimates but a significant miss of analysts’ revenue estimates.

The stock is down 27.7% since reporting and currently trades at $2.48.

Read our full, actionable report on Xerox here, it’s free for active Edge members.

Market Update

Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.

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