Hewlett Packard Enterprise Stock Soars on Strong Demand for AI-Focused Servers
Hewlett Packard Enterprise (HPE) stock is rapidly nearing its 2018 record high as investors seize the opportunity to invest in the company’s artificial intelligence (AI)-focused servers powered by Nvidia chips.
Surge in Stock Price
HP Enterprise shares surged by 4.5% on Tuesday, marking a four-day run of over 20%. This uptrend follows significant movements in the shares of other key players like Super Micro Computer and Dell Technologies, who are also experiencing a surge in demand for AI servers.
Momentum in AI-Related Servers
Despite HPE’s recent January quarter financial results falling short of Street estimates, CEO Antonio Neri revealed a significant momentum in AI-related server orders. The company reported $4 billion in AI-related server orders since the start of fiscal 2023, resulting in a backlog of $3 billion, which increased by $500 million in the latest quarter.
Supply Constraints and Optimistic Outlook
Addressing the supply constraints, Neri mentioned a deluge of new orders flowing in, albeit limited by the current supply. In a call with J.P. Morgan analyst Samik Chatterjee, HP Enterprise investor relations head Jeff Kvaal elaborated on the situation, highlighting that the company would have shipped more systems if more Nvidia chips were available.
Furthermore, Kvaal reassured investors that the GPU supply has been on track as planned over the past six to nine months. Despite current limitations, the company remains buoyed by the positive outlook for its AI server business. Kvaal expressed satisfaction with the order pipeline, emphasizing its continuous growth and superior size compared to the reported backlog.
Emphasizing the company’s positive long-term view, Kvaal underlined the optimistic trajectory of HPE’s AI server business. As demand continues to surge, HPE remains at the forefront of innovation in AI-focused servers.
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