HPE Q4 Earnings Beat Expectations

(Reuters) – Hewlett Packard Enterprise (NYSE:HPE) surpassed Wall Street expectations for fourth-quarter revenue and profit on Thursday, driven by robust demand for its AI-powered servers.

Shares of HPE saw a 1.5% increase in extended trading.

The strong demand for HPE’s servers, enhanced with Nvidia (NASDAQ:NVDA) processors, reflects enterprises' significant investments in hardware essential for processing vast data used in AI model training.

Despite weaker performance, HPE's Intelligent Edge business, which provides networking hardware like switches and Wi-Fi access points, is improving. However, Intelligent Edge revenue fell 20% to $1.12 billion in Q4.

Earlier this year, HPE finalized its acquisition of Juniper Networks (NYSE:JNPR) to boost its market share in the competitive networking industry.

Total revenue for Q4 reached $8.46 billion, exceeding estimates of $8.26 billion, according to LSEG data. Server revenue rose 32% to $4.71 billion for the quarter ending October 31.

For Q1, HPE anticipates revenue growth in the mid-teens percentage range, aligning with analysts' expectations.

On an adjusted basis, HPE reported earnings of 58 cents per share, beating the estimated 56 cents.