Hewlett Packard Enterprise sees third-quarter revenue above estimates on robust AI demand

Hewlett Packard Enterprise (HPE) exceeded Wall Street’s expectations with its third-quarter revenue forecast, driven by strong demand for its AI servers. This positive outlook boosted its shares by 11% in extended trading.

The company’s AI-optimized servers, featuring Nvidia hardware, are in high demand as businesses increasingly require high-performance computing for AI applications. “Our AI systems revenue more than doubled from the previous quarter, thanks to a robust order book and improved supply chain conversion,” said CEO Antonio Neri.

HPE is also seeing growth in its hybrid cloud and data storage segments due to AI integration. In contrast, competitor Dell saw a surge in AI server shipments last month, though this came at the expense of profit margins.

CFO Marie Myers highlighted the promising outlook for hybrid cloud and networking, noting, “Long-term trends in these areas position us well for future growth,” which is encouraging for the networking market still facing weaker demand.

HPE projected third-quarter revenue between $7.4 billion and $7.8 billion, surpassing the $7.46 billion estimated by analysts. The company’s second-quarter revenue of $7.20 billion also beat expectations of $6.82 billion.

Additionally, HPE raised its full-year adjusted earnings per share forecast to a range of $1.85 to $1.95, up from the previous range of $1.82 to $1.92. The company posted adjusted earnings of 42 cents per share for the quarter, exceeding the 39 cents expected by analysts.