HPE projects revenue above estimates as AI hardware demand drives $5 billion server backlog

HPE Projects Sales That Top Estimates on AI Hardware Demand

Hewlett Packard Enterprise Co. gave an outlook for revenue in the current quarter that exceeded analysts' estimates, a sign the company is benefiting from solid demand for hardware that helps customers run AI workloads. Sales will be $9.6 billion to $10 billion in the period ending in April, the company said Monday in a statement, compared with the $9.57 billion average estimate of analysts polled by Bloomberg. Profit, excluding some items, will be 51 cents to 55 cents a share, HPE said, in line with the average estimate of 53 cents. The company reiterated its revenue growth outlook for the full year, while raising its annual earnings forecast to $2.30 to $2.50 a share. Analysts, on average, anticipated $2.35. HPE is seeing strong demand for its networking products, driven by a boom in artificial intelligence tasks that need faster ways to route data. The Texas-based company purchased Juniper Networks for about $13 billion last year and sees networking as a major part of its future expansion. In the most recent quarter, HPE widened margins by raising prices and opting to forgo supplying some customers as the industry deals with severe price increases and shortages of memory chips. "We executed with very, very, strong discipline in a very dynamic environment driven by the supply chain shortages and inflationary cost," Chief Executive Officer Antonio Neri said in an interview. In the fiscal first quarter, sales rose 18% to $9.3 billion, while profit, excluding items, was 65 cents a share. Analysts had expected sales of $9.37 billion and profit of 58 cents. Cloud and AI revenue, which includes servers and storage, declined 2.7% to $6.3 billion, although margins in the unit widened. The company has an AI server backlog of $5 billion, Neri said. The shares were little changed in extended trading after closing at $21.81 in New York. The stock has fallen 9.2% so far this year. HPE expects the memory chip shortage to continue well into next year. The company is raising prices, in some cases even between when it quotes prices and when it ships products. HPE also is forgoing supplying some equipment to mobile service providers to focus on higher-profit clients like enterprise customers and sovereign deals. "We are not done raising prices," Neri said. Still, HPE isn't really losing any market share, he said. "There are markets and segments and products that you may gain share, and other ones maybe you're losing share, depending on what the opportunity is," Neri said. "But on average, we're all in the same boat." The company is also vying for more contracts with countries building their own AI clouds, but those deals take longer to sign and get US export control approval, so that revenue is likely to show up in the latter half of the year, Neri said.

Hewlett Packard Enterprise forecasts revenue above estimates

March 9 (Reuters) - Hewlett Packard Enterprise (HPE.N), opens new tab forecast second-quarter revenue above Wall Street estimates on Monday, betting on growing demand for its artificial intelligence-powered servers that are equipped with ⁠Nvidia's chips. The company expects quarterly revenue to be between $9.6 billion to $10.0 billion, above the analysts' average estimate of $9.58 billion, according to data compiled by LSEG. Big Tech firms like Alphabet (GOOGL.O), opens new tab, Microsoft (MSFT.O), opens new tab, Amazon (AMZN.O), opens new tab and Meta (META.O), opens new tab ⁠are expected to spend at least $630 billion to build AI infrastructure this year, which would boost demand for ⁠server and data center equipment from vendors such as Dell (DELL.N), opens new tab, HPE and ⁠Super Micro Computer (SMCI.O), opens new tab. HPE's total revenue for the first quarter rose around 18% ⁠to $9.30 billion, compared with estimates of $9.33 billion. Reporting by Jaspreet Singh in Bengaluru; Editing by Alan Barona Our Standards: The Thomson Reuters Trust Principles., opens new tab

Hewlett Packard Enterprise forecasts revenue above estimates on AI boom

March 9 (Reuters) - Hewlett Packard Enterprise forecast second-quarter revenue above Wall Street estimates on Monday, betting on growing demand for its artificial intelligence-powered servers that are equipped with Nvidia's chips. Shares of the company rose 3.2% in extended trading. Big Tech firms like Alphabet, Microsoft, Amazon and Meta are expected to spend at least $630 billion to build AI infrastructure this year, which would boost demand for server and data center equipment from vendors such as Dell, HPE and Super Micro Computer. "Demand for our products and solutions was strong, with orders increasing double digits year over year across all segments," HPE CEO Antonio Neri said in a statement. The company expects quarterly revenue to be between $9.6 billion and $10.0 billion, above the analysts' average estimate of $9.58 billion, according to data compiled by LSEG. Revenue for the first quarter rose around 18% to $9.30 billion, missing estimates of $9.33 billion. The company's adjusted earnings per share of 65 cents exceeded estimates of 59 cents. U.S. trade regulations and surging memory chip costs due to the buildout of AI infrastructure have forced companies to increase prices in a bid to offset cost pressures. Almost all servers have memory chips that hold data and instructions, keeping processors running at high speed, which is paramount for AI applications. HPE raised its fiscal 2026 adjusted EPS forecast to $2.30 to $2.50, compared with its prior expectations of $2.25 to $2.45. (Reporting by Jaspreet Singh in Bengaluru; Editing by Alan Barona)