Hewlett Packard Enterprise Co. saw a major surge in its stock price after reporting better-than-expected earnings and revenue, driven by increased demand for servers supporting AI workloads. Sales of AI servers were boosted by the availability of NVIDIA H100 GPUs. The company posted earnings of 42 cents per share, surpassing Wall Street estimates, with revenue hitting $7.2 billion in the second quarter. CEO Antonio Neri highlighted the company’s strong performance in the server business, with AI system revenue growing more than 50% to over $900 million. Despite weak performance in other segments, Neri expressed confidence in the profitability of selling AI servers to enterprise customers, citing a stable order book and 11% operating margin in the server segment. Neri also expects continued strong demand for AI servers, with guidance for a decent quarter ahead. Analysts noted that HPE’s focus on AI as a growth engine has been successful, but expressed concerns about declines in other key areas. HPE raised its full-year revenue forecast, expecting sales growth of 1-3% and earnings of $1.85 to $1.95 per share. Overall, the company is optimistic about its future prospects in the AI server market.
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https://siliconangle.com/2024/06/04/strong-ai-server-sales-power-solid-earnings-beat-hpe-stock-shoots/
HPE’s Strong AI Server Sales Drive Impressive Earnings Growth, Boosting Stock Value
