Oracle's earnings provided an upbeat read for hardware suppliers, but the upcoming Fed decision on interest rates could dictate just how much they continue benefitting, an expert says

Dell's stock was up 12% on Friday.

Shares of server makers Dell Technologies and Hewlett Packard Enterprise led the S&P 500's gainers on Friday, as investors were reassured about data-center spending by Oracle's latest earnings report.

Oracle's (ORCL) 30% revenue growth and expanding backlog for its artificial-intelligence cloud services showed investors that AI spending "remains robust and can translate into revenue," according to Brian Mulberry, chief market strategist at Zacks Investment Management. That offered a boost to Dell (DELL) and HPE (HPE), which provide data-center hardware.

Mulberry also pointed to Dell's own recent earnings report, which showed its AI server business reaching $60.9 billion in orders and the company's backlog swelling to $95 billion.

Accelerating demand for traditional and AI servers, as well as storage and networking equipment, is benefitting both Dell and HPE, Mulberry said in emailed comments. He noted that Dell has greater exposure to large-scale orders for AI servers, while HPE has strength from its broad networking and enterprise infrastructure offerings.

HPE's stock gained 12.4% on Friday, setting an all-time closing high, according to Dow Jones Market Data. Dell's stock rose 12%, also booking a record close, the data showed.

RBC Capital Markets analyst David Paige initiated coverage of Dell's stock on Thursday with an outperform rating - writing in a note to clients that the company's "end-to-end portfolio across compute, PCs, storage and servers, along with its install base, best-in-class-supply chain and flexible consumption options," put it in a strong position to continue gaining share within the market for AI infrastructure.

Ryan Lee, senior vice president of product and strategy at Direxion, said strong results from cloud-services providers like Oracle often provide a tailwind for hardware makers that are supplying the data-center build-out.

Zooming out, however, Lee said the broader tech market is being driven by two things in the near term: oil prices (CL00) (BRN00) and next week's Federal Reserve policy meeting, at which the U.S. central bank could decide to raise interest rates.

If the Fed decides against raising rates, Lee said he expects many tech names to "be in very good shape." But if interest rates go up, as is the prevailing expectation, he said the reaction among AI-related stocks could vary.

"The reality is, when cost to borrow goes up, you're not going to see as favorable of a reaction for big-cap companies," Lee said, referring to companies with large market capitalizations. "Even the big dogs won't be able to escape a higher[-rate] environment."

Lee said investors will be watching the Fed's decision leading into November's midterm elections, as well as how oil prices unfold amid tensions between the U.S. and Iran, all of which will have implications for tech stocks.

In the long run, Lee said it will be worth watching how sticky massive AI spending continues to be given changes in the broader market and economic environment. "The answer the market has given so far is very sticky," he noted.

Therefore, Lee expects hardware suppliers like Dell and HPE to continue having an advantage in the short to medium term - but "how big of a beneficiary they are is going to be dictated by rates," he added.

-Britney Nguyen