HP Enterprise Rides AI Wave: Strong Q4 Earnings Driven by Server Demand

HP Enterprise Earnings Top Expectations as AI Demand Boosts Server Sales

The company forecast revenue would grow in the mid-teens in the current quarter, an outlook consistent with analysts' expectations. Hewlett Packard Enterprise (HPE) delivered fiscal fourth-quarter earnings that beat analysts' expectations, driven by growth in server revenue. The server maker posted record revenue of $8.5 billion, up 15% year-over-year and above the analyst consensus compiled by Visible Alpha. Net income was $1.34 billion, or 99 cents per share, up from $642 million, or 49 cents per share, a year earlier. HP Enterprise server revenue jumped 32% to $4.7 billion, above analysts' estimates. In October, the company unveiled new servers powered by Advanced Micro Devices (AMD) chips and designed to support artificial intelligence (AI) clusters for tasks like training large language models. Revenue from the company's Intelligent Edge segment fell 20% year-over-year to $1.1 billion, while revenue in its cloud segment rose 18% to $1.6 billion. Looking ahead, HP Enterprise expects first-quarter revenue growth in the mid-teens. The analyst consensus is 14% growth. Shares of HP Enterprise rose slightly in recent after-hours trading. The stock was up about 27% in 2024 through Thursday's close, in line with the S&P 500's gain over the period.

Hewlett Packard Enterprise beats quarterly results estimates on strong AI server demand

(Reuters) - Hewlett Packard Enterprise beat Wall Street expectations for fourth-quarter revenue and profit on Thursday, as it benefits from strong demand for its servers used to power artificial intelligence applications. Shares of the company rose around 1.5% in extended trading. Demand for HPE's servers, equipped with Nvidia processors, has remained healthy as enterprises invest heavily in hardware that can support and process the swathes of data used in training AI models. Despite a weaker performance, HPE has been seeing an improvement in its Intelligent Edge business, which provides networking hardware such as switches and Wi-Fi access points. Intelligent Edge revenue fell 20% to $1.12 billion in the fourth quarter. HPE finalized a deal at the start of the year to acquire networking equipment maker Juniper Networks, in a move to boost its networking market share in a competitive industry. Total revenue for the fourth quarter came in at $8.46 billion, beating estimates of $8.26 billion, as per data compiled by LSEG. Server revenue rose 32% to $4.71 billion in the quarter ended Oct. 31. For the first quarter, HPE expects revenue to grow in the mid-teens percent, roughly in line with analysts' estimates. On an adjusted basis, the company earned 58 cents per share, beating estimates of 56 cents apiece. (Reporting by Zaheer Kachwala in Bengaluru; Editing by Alan Barona)

HPE AI Servers and Cloud Strength Lead the Charge: Analysts Raise Price Forecasts - Hewlett Packard (NYSE:HPE)

Analysts raised FY25 targets, citing server strength, storage momentum, and benefits from acquisitions like Juniper. Hewlett Packard Enterprise Co HPE shares are trading higher after it reported its fourth-quarter results after Thursday's closing bell. The company reported adjusted EPS of 58 cents, which beat the analyst consensus estimate of 56 cents. Sales rose 15% year over year (Y/Y) to $8.46 billion, which beat the analyst consensus estimate of $8.26 billion. Hewlett Packard sees first-quarter earnings of between 47 and 52 cents per share versus the 49 cent estimate. Stifel analyst Matthew Sheerin raised the price forecast on the HPE stock to $25 from $22 while maintaining a Buy rating. The analyst believes Hewlett-Packard Enterprise shares are undervalued, supported by its broad portfolio of infrastructure hardware, software, and services. Despite mixed demand, with weakness in networking and storage, HPE is seeing strong AI server demand and signs of recovery in traditional servers, adds the analyst. Sheerin expects AI servers to drive growth in FY25 and for gross margins to improve through a better mix and higher software and services attachment. The analyst revised estimates for revenue to $32.250 billion (from $31.749 billion) and EPS to $2.11 (from $2.10) for FY25 on the continued server strength and introduced FY26 revenue of $33.803 billion and adjusted EPS of $2.29. JP Morgan analyst Samik Chatterjee writes that he expects a choppy outlook for HP Enterprise following mixed earnings from industry leaders. The analyst anticipates some upside in its Enterprise Server and Networking segments, though AI server headwinds and potential Fed spending slowdowns may impact guidance. Chatterjee estimates revenue of $8.24 billion in the fourth-quarter vs. consensus of $8.26 billion. B Of A analyst Wamsi Mohan reaffirmed a price target of $26 and a Buy rating. Heading into FY25, the analyst believes HPE is well-positioned to benefit from a recovery in IT spending, driven by cyclical growth in servers, storage, and networking and the Juniper acquisition and associated cost savings. The analyst also adds that the strength in Hybrid Cloud and higher AI server margins due to increased enterprise and sovereign demand are expected to be drivers. Goldman Sachs analyst Michael Ng raised the F25/26/27 EPS estimates by an average of 2% to reflect the growing AI pipeline and storage momentum. Investors can gain exposure to the stock via the First Trust S&P 500 Diversified Dividend Aristocrats ETF KNGZ and the Roundhill Generative AI & Technology ETF CHAT. Price Action: Hewlett Packard shares are up 10.80% at $23.99 at the last check Friday. Read Also: Uber And WeRide Partner For Robotaxi Service In Abu Dhabi HPEHewlett Packard Enterprise Co$24.0411.0%Overview Rating:Speculative50%Technicals Analysis660100Financials Analysis400100WatchlistOverviewCHATRoundhill Generative AI & Technology ETF$42.081.28%KNGZFirst Trust S&P 500 Diversified Dividend Aristocrats ETF$34.610.07%Market News and Data brought to you by Benzinga APIs

HP Enterprise Stock Rallies As Analysts Boost Price Targets After Earnings

Hewlett Packard Enterprise (HPE) shares popped after the company's better-than-expected fiscal fourth-quarter results drew price target bumps from analysts. Stifel reiterated its buy rating for the server maker and upgraded its price target to $25 from $22, calling the company's shares "undervalued" amid "strong demand for [artificial intelligence (AI)] servers and signs of a recovery in traditional servers." Morgan Stanley upgraded HP Enterprise to "overweight" from "equal weight" and raised its price target to $28 from $23. The firm noted that HP Enterprise outperformed its results from last quarter "driven by AI servers." AI server revenue was in line with expectations at $1.5 billion. In its fiscal fourth quarter, HP Enterprise posted record revenue of $8.5 billion, up 15% year-over-year and above the analyst consensus compiled by Visible Alpha. Net income was $1.34 billion, or 99 cents per share, up from $642 million, or 49 cents per share, a year earlier. HP Enterprise server revenue jumped 32% to $4.7 billion, above analysts' estimates. In October, the company unveiled new servers powered by Advanced Micro Devices (AMD) chips and designed to support AI clusters for tasks like training large language models. Shares of HP Enterprise rose more than 10% to $24.01 intraday Friday and have gained more than 40% in 2024.

Rising AI server demand drives another strong earnings and revenue beat for HPE - SiliconANGLE

Rising AI server demand drives another strong earnings and revenue beat for HPE Hewlett Packard Enterprise Co. delivered solid fourth-quarter financial results today, beating Wall Street's expectations on both earnings and revenue, but investors were unmoved by the company's tepid guidance, and its stock was flat after-hours. The company reported earnings before certain costs such as stock compensation of 58 cents per share, up 12% from one year earlier and ahead of Wall Street's target of 56 cents. Revenue for the period rose 15%, to $8.46 billion. Analysts had forecast sales of just $8.25 billion. They were strong numbers and they helped to boost HPE's button line, with its overall profit rising to $1.37 billion in the quarter, up from just $512 million in the same period one year ago. HPE President and Chief Executive Antonio Neri hailed the company's "exceptional" performance in the quarter, noting that it drove record quarter sales to cap off a strong fiscal 2024 year. "We exceeded our commitments for revenue, earnings per share and free cash flow," he added. Over the last year, HPE, together with rivals in the server-making industry such as Dell Technologies Inc. and Super Micro Computer Inc., has been given a strong boost from the growing demand for high-powered systems that come equipped with Nvidia Corp.'s graphics processing units. The demand stems from the urgency of businesses to get the computing infrastructure needed for artificial intelligence workloads up and running in their corporate data centers. The demand for AI servers was once again evident in HPE's server business segment, with sales rising 32% from a year earlier to $4.71 billion in the quarter, ahead of the Street's target of $4.66 billion. Neri told analysts on a conference call that, unlike some of its competitors, the company has been able to maintain its server growth rate without needing to compete on price, which meant it was also able to sustain its profitability. "HPE manages the business with incredible discipline in terms of customer segments and pricing," he said. "Ultimately, we participate in AI in a disciplined way." HPE's hybrid cloud business segment also put in a strong shift, with sales there rising to $1.6 billion, up 18% on a sequential basis and 22% from the year-ago period. Neri said the growth stemmed from a mix of new customers and existing ones coming back for more. The company's intelligent edge segment added $1.1 billion in sales, down 20% from a year ago. That business, which encompasses sales of networking equipment for data centers, struggled due to what Neri termed a "downcycle". "When we entered 2024, we understood that the market was going through a transition period driven by the digestion of infrastructure that was bought in the previous two years," he explained. The CEO said that the company is expecting to see the next major refresh cycle for networking begin within the next 12 to 18 months, but the segment should be boosted earlier than that, for it's getting closer to closing on its blockbuster $14 billion acquisition of Juniper Networks Inc. In an update, company officials told analysts that the deal received approval from regulators in the U.K. during the quarter. It has already been given the go ahead by relevant authorities in the European Union, India, South Korea and Australia, and now just needs to convince U.S. regulators. That should happen soon, and the company maintained that the deal should close as predicted in early 2025. As for the company's last major segment, financial services, it delivered $893 million in sales, up 2% from a year earlier. Looking to the next quarter, HPE said it's looking for earnings of between 47 cents and 52 cents per share, the midpoint being roughly in-line with Wall Street's forecast of 49 cents per share.

HPE Reports Strong Sales Growth on Boost From AI, Servers

Hewlett Packard Enterprise Co. reported better-than-expected quarterly revenue and a jump in sales of servers to power artificial intelligence work. Fiscal fourth-quarter revenue increased 15% to $8.46 billion, the company said Thursday in a statement. Analysts, on average, estimated $8.26 billion. Profit, excluding some items, was 58 cents per share, ahead of the average of 56 cents expected by Wall Street.

Citi raises Hewlett Packard Enterprise on AI momentum By Investing.com

Investing.com -- Citi analysts upgraded Hewlett Packard Enterprise (NYSE:HPE) to Buy from Neutral on Friday, citing robust AI-driven growth and improving fundamentals. The price target was raised to $26 from $23, reflecting optimism about HPE's position in the evolving enterprise tech landscape. "AI server momentum continues to remain robust in 4Q24 results, with the company noting strength in AI systems, said Citi, noting that AI revenues surged over 300% year-over-year in Q4, reaching $1.5 billion. Citi projects continued AI revenue growth of over 25% annually through 2026, supported by increasing enterprise adoption and innovations like liquid cooling technology. The analysts highlighted HPE's deep pipeline, which includes $3.5 billion in orders post-Q4, underscoring its strategic positioning in private cloud AI solutions. Networking recovery is another positive factor, with three consecutive quarters of order growth. While Q4 revenues were flat sequentially, Citi sees potential for further gains, particularly after the anticipated completion of the Juniper acquisition. They believe the deal could drive up to 16% EPS accretion by FY26, bolstering HPE's margin profile and increasing networking's share of total sales to 25-30%. Citi also said: "Hybrid cloud revenues grew 18% y/y and 22% q/q, and came in much better on expected on demand in private cloud and ongoing adoption of HPE Alletra storage." Analysts noted that improving server demand and new AI-driven opportunities provide a foundation for sustained growth. Citi acknowledges risks, including potential delays in the Juniper acquisition, supply constraints for GPUs, and competitive pressures. However, the bank argues that HPE's growing AI presence, core market recovery, and favorable valuation -- trading at an 11x forward P/E with a discounted multiple to peers -- present meaningful upside. "Even at a ~20% discounted multiple to peers, we see meaningful upside to shares," concluded Citi.