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HP Enterprise Stock Extends Gains, Nearing Record, on AI Server Demand

HP Enterprise Stock Extends Gains, Nearing Record, on AI Server Demand
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HP Enterprise shares jumped 4.5% Tuesday, boosting the stock’s four-day run to more than 20%. The rally follows even bigger recent moves in shares of

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Super Micro Computer

and Dell Technologies, both of which also have seen growing demand for AI servers.

Last week, HPE reported January quarter financial results that failed to meet Street estimates, and the stock initially moved lower on the news. But the computer company also reported that it is seeing significant momentum in AI-related servers, and that appears now to be attracting investor attention.

CEO Antonio Neri told Barron’s last week the company has had $4 billion in AI-related server orders since the start of fiscal 2023, with a backlog that now sits at $3 billion, up $500 million in the latest quarter.

“We’re seeing a lot of new orders coming in, but we don’t have all the supply to convert it,” Neri said in the interview.

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In a conference call on Monday with J.P. Morgan analyst Samik Chatterjee, HP Enterprise investor relations head Jeff Kvaal said the company could have shipped more systems if it had more Nvidia chips.

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But Kvaal also said the company received the number of chips that it had expected, and the supply of GPUs, or graphics processing units, was exactly as scheduled over the last six or nine months.

“The GPU supply seems to be on track,” he said.

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Asked about the long-term outlook for the company’s AI server business, Kvaal said “we’re pretty happy with what we can see.” He notes that the company’s order pipeline is “a lot bigger” than the reported backlog.

“And the pipeline grows all the time,” he added. “Our long-term view is very positive.”

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Write to Eric J. Savitz at eric.savitz@barrons.com





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