Key Takeaways
- Hewlett Packard Enterprise reports fiscal third-quarter earnings after markets close Wednesday.
- The server manufacturer is expected to report higher revenue and profit than a year ago.
- Analysts have suggested that the company is a “forgotten” beneficiary of the artificial intelligence boom amid focus on Nvidia and other tech giants.
Hewlett Packard Enterprise (HPE) reports fiscal third-quarter earnings after the closing bell Wednesday, with analysts expecting the server and storage maker to post year-over-year increases in revenue and profit as demand for its products to power artificial intelligence (AI) products boosts sales.
HP Enterprise is projected to report revenue up 9% from a year ago to $7.63 billion, with profit projected to see an 18% bump to $547.3 million.
Analysts have suggested that HP Enterprise is a beneficiary of the AI boom that markets may have “forgotten” about. The company’s second-quarter earnings sent the stock nearly 24% higher in a stretch of just over a week following the report.
| Analyst Estimates for Q3 2024 | Q2 2024 | Q3 2023 | |
| Revenue | $7.63 billion | $7.2 billion | $7 billion |
| Diluted EPS | 41 cents | 24 cents | 35 cents |
| Net Income | $547.3 million | $314 million | $464 million |
Key Metric: AI Systems Revenue
Spending across the AI industry has been a focus of some of tech’s biggest companies in recent quarters, with markets looking for signs that massive investments in the sector will pay off with revenue down the line. HP Enterprise said in the second quarter that its AI-related revenue more than doubled from the first quarter, as it fulfilled backlogged orders thanks to an improving supply chain.
JPMorgan analysts said that they see positives in Wednesday’s earnings because of the “robust” nature of AI demand and better-than-expected supply for HP Enterprise. They said HP Enterprise is positioned “to benefit as well even though maybe more moderately than peers” Dell (DELL) and Super Micro Computer (SMCI).
Business Spotlight: Analysts See Upside, Potential Outlook Boost
JPMorgan analysts said that recovery in demand for other types of cloud storage and networking equipment also bodes well for HP Enterprise’s earnings. The analysts added they see the potential for those factors to lead to HP Enterprise lifting its full-year projections.
HP Enterprise shares were more than 1% lower Tuesday afternoon at $19.16, about 13% above where they started the year but below the record levels that followed June’s earnings report.