NEW YORK (CNN/Money) - Dell Computer will probably report a substantial gain in sales and earnings for its fiscal first quarter on Thursday. That's the good news.

The bad news is that investors shouldn't interpret Dell's strength as a sign of greater things to come for the entire tech sector.

"I expect them to say that things are still challenging," said Eric Rothdeutsch, an analyst with Friedman Billings Ramsey.

According to First Call, analysts expect the company to report earnings of 23 cents a share, up 35 percent from 17 cents in the same quarter last year, and sales of $9.5 billion, a 17 percent increase from $8.1 billion.

While many large tech hardware companies reported strong earnings growth in the first quarter, it was mainly due to cost cutting. And Dell has been able to consistently report revenue growth at the expense of competitors like Hewlett-Packard, IBM, Gateway and Sun Microsystems -- not because of a pickup in corporate demand for hardware.

"It's all market share gains for Dell. You will not see Dell hint at industry growth," said Brent Bracelin, an analyst with Pacific Crest Securities.

Analysts said they would be focusing closely on Dell's non-PC businesses.

Even though the majority of Dell's sales come from desktops and notebooks, the company is focusing increasingly on servers, storage and networking equipment (as such, it is asking shareholders to approve a name change from Dell Computer to Dell Inc.).

Revenue from Dell's enterprise systems division, which includes servers, storage and networking, increased 18.5 percent in fiscal 2002, and accounted for nearly 20 percent of total sales.

Bill Fearnley Jr., an analyst with Midwest Research, said that Dell should report market share gains in servers and storage despite continued weak demand overall.

And Rothdeutsch said he expects that Dell's printer business probably did better than expected as well, although it might be too small for the company to highlight in its results. Dell recently entered the printer market through a partnership with Lexmark, the industry's second-largest player.

Overall, Dell is unlikely to disappoint investors but probably won't provide evidence of a broader upswing in tech. Bracelin said the company probably would meet estimates for the first quarter and give guidance for its second quarter that is in line with the current consensus.

Wall Street is predicting that Dell will earn 24 cents a share in the second quarter on revenue of $9.8 billion, up from 19 cents on sales of $8.5 billion a year ago.

But will that be enough to satisfy the market? Dell was one of the few tech firms not to use the Iraq war excuse when discussing its prior quarterly results, so it's unlikely the company will cite the end of the war as a cause for optimism.

If Dell breaks the pattern of the past few quarters and indicates that it is seeing actual improvement in corporate IT spending, then that could be a huge lift to tech and a validation of the sector's explosive rally.

Dell, for that matter, hit a new 52-week high Tuesday and the stock is up more than 20 percent this year. It now trades at 32 times estimates for this fiscal year, which ends in January.

While Dell clearly has momentum, signs of a broader recovery in tech might be needed for the stock to maintain its valuation.

"You have to look at Dell and say to yourself that it's had quite a run," said Fearnley, who has the stock rated a "neutral."

Analysts cited in this story do not own shares in Dell and their firms do not do investment banking for the company.