Hardware's Hopes Are Now Pinned on Dell

Of course, investors unsettled by semiconductor inventory buildups and a disappointing demand outlook on Tuesday from Cisco(CSCO) also will home in on Dell's commentary on corporate spending.

But the company isn't an ideal proxy for the broader tech market, because ongoing share gains allow it to grow faster than its peers. In the second calendar quarter alone, Dell boasted PC shipment growth of 29% over prior year levels -- far above the industry average of 10% growth, according to IDC. Dell held the top spot in the global PC market in the second quarter with an 18.3% share while claiming the strongest year-on-year growth of top vendors, at 22% (tied with Toshiba).

Dell execs, prone to sounding justifiably smug, are likely to counsel investors to expect more of the same on the share-gain front. But it shouldn't come as a shock if Dell managers opt for the safe route and hedge their broader industry comments with words of caution.

Analysts are gearing for Dell to guide for October quarter EPS of 33 cents with sales growth of 7% from the prior quarter, to about $12.5 billion in revenue. That's about in line with 2003 and 2001, when Dell notched 8% growth rates for the October quarter (Dell saw a sequential decline in 2002 and over 10% growth in 2000, noted A.G. Edwards).

"We think there have been signs that the PC markets remain strong and that pricing is stabilizing," said A.G. Edwards analyst David Wong in a recent note. "For these reasons we think that there is some potential upside to our estimate, but we think that in the first instance, Dell will probably not state expectations that are much higher than $12.5 or $12.6 billion." (His firm doesn't have a banking relationship with Dell).

First Albany's Joel Wagonfeld likewise said he's expecting in-line guidance, consistent with Dell's normal seasonal patterns. (His firm hasn't done banking for Dell).

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