tech
HPE skyrockets 30% on biggest earnings beat since 2018
HPE's blowout second-quarter earnings report was highlighted by a strong Cloud & AI segment that showed soaring server revenue.
TL;DR
- HPE shares jumped 30% after reporting blockbuster second-quarter results that surpassed estimates.
- Earnings per share were 79 cents (adj.) versus 53 cents expected, and revenue reached $10.68 billion versus $9.79 billion expected.
- Server revenue, a sub-division of the Cloud & AI unit, significantly outperformed expectations.
- The company raised its full-year EPS guidance by $1, projecting fiscal year 2026 EPS of $3.35 to $3.45.
- CEO Antonio Neri noted triple-digit growth in traditional server bookings, resulting in the largest backlog ever.
- HPE is focusing on providing AI services to national labs and enterprises, which are described as higher-margin opportunities.
- A new server rack, powered by Nvidia's Vera CPUs and optimized for agentic AI workloads, is set to be released in the fall and is expected to be a major growth driver.
- The New York Stock Exchange is among the customers planning to use the new server technology.