Shares of Hewlett Packard Enterprise (HPE) soared more than 12 per cent in the morning session on Wednesday after the company reported upbeat second quarter results and predicted stronger third quarter revenue on growing demand for its AI-servers.
Texas-based HPE is set to add more than $2 billion to its market capitalization based on its current price of $19.84.
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At 11:50 am EDT, the HPE shares were at $19.70, up 11.96 per cent.
The company forecast third quarter revenue of $7.4 billion to $7.8 billion.
HPE also raised its forecast for full year adjusted earnings per share to a range of $1.85 to $1.95, from a prior forecast of $1.82 to $1.92 per share.
The company reported revenue of $7.20 billion for the second quarter ended April 30.
In the reported quarter, HPE’s server revenue surged 18 per cent from a year earlier, to $3.9 billion.
Its AI-server revenue more than doubled sequentially to $900 million, and order backlog stood at $3.1 billion.
“AI systems revenue more than doubled from the prior quarter, driven by our strong order book and better conversion from our supply chain,” said Hewlett Packard Enterprise chief executive officer Antonio Neri.
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The company’s lead times – the duration between starting and completing a process – to deliver Nvidia’s AI-powered chips is now between six weeks and 12 weeks, Neri had said in a post-earnings call.
“Long-term trends across hybrid cloud and networking also position us well for the future,” said Hewlett Packard Enterprise CFO Marie Myers.
HPE’s rival Dell Technologies forecast current quarter profit below Wall Street estimates.
US stocks
US stocks were mixed on Wednesday.
At 12:20 p.m. ET, the Dow Jones Industrial Average was down 4.89 points, or 0.01 per cent, at 38,706.40, the S&P 500 was up 35.69 points, or 0.67 per cent, at 5,327.03, and the Nasdaq Composite was up 228.20 points, or 1.35 per cent, at 17,085.25.
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Published: 05 Jun 2024, 09:34 PM IST
