HEWLETT Packard Enterprise (HPE) reported revenue that beat analysts’ estimates on a big jump in sales of servers built to handle artificial intelligence (AI) work. The shares rose in extended trading.
Fiscal second-quarter revenue increased 3.3 per cent to US$7.2 billion, the company said on Tuesday (Jun 4). Wall Street projected a 2 per cent decline year over year to US$6.8 billion according to data compiled by Bloomberg. Profit, excluding some items, was 42 US cents per share. Analysts, on average, estimated 39 US cents.
The strong performance was due to the company’s server business, which generated sales of US$3.9 billion. Analysts, on average, estimated US$3.5 billion. Sales of AI-oriented systems doubled to more than US$900 million compared with the first quarter, the company said. Increased demand and better availability of high-powered semiconductors from Nvidia led to the jump in AI systems, chief executive officer Antonio Neri said.
The shares gained about 10 per cent in extended trading after closing at US$17.59 in New York. While server peers Dell Technologies, and Super Micro Computer have seen share gains of 77 per cent and 171 per cent, respectively, this year due to their AI-server businesses, HPE stock has increased just 3.6 per cent.
“I think the market will start waking up about this,” Neri said of HPE’s AI server business. “I think after today’s announcement, they will understand even more.”
Sales will be US$7.4 billion to US$7.8 billion in the period ending in July, the company said. Analysts, on average, projected US$7.5 billion. Profit, excluding some items, will be 43 US cents to 48 US cents a share, compared with an estimate of 46 US cents. BLOOMBERG
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