Hewlett Packard Enterprise (HPE) recently reported a sales increase of over 12% in the third quarter, surpassing Wall Street forecasts. The growth was driven by the rising demand for AI-optimized servers, with companies like HPE supporting energy-intensive data centers due to investments in generative AI technology. CEO Antonio Neri shared that lead times for Nvidia’s AI-powered chips are between six and twelve weeks, indicating strong shipments ahead. The company’s stock price rose to $19.84, with analysts raising price targets to $19-$23.
Compared to competitors Dell and Super Micro Computer, HPE trades at 8.9 times its 12-month earnings forecasts. Data from LSEG shows projected third-quarter revenue between $7.4 billion and $7.8 billion, exceeding analyst estimates. Server revenue for the second quarter reached $3.9 billion, up 18% from last year, with AI server revenue doubling to $900 million sequentially. Analysts suggest that AI servers may impact HPE’s margins, while Dell predicts reduced margins due to increased expenses in producing AI servers.
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