Dec 4 (Reuters) – Hewlett Packard Enterprise forecast first-quarter revenue below Wall Street estimates on Thursday, as it sees a fall in AI server income due to customers shifting their orders to the second half of the year.
Shares of HPE, which provides AI-optimized servers that run on high-end Nvidia processors, fell over 9% in extended trading.
“In cloud and AI, we continue to see the impact of lumpiness and AI server revenue and expect a sequential decline in the AI server revenue with the majority of AI deals shipping in the latter half of the year,” CFO Marie Myers said on a post-earnings call.
HPE expects AI server demand to remain uneven as some of its larger sovereign customers are placing orders with extended lead times, which may defer shipments to future periods, Myers added.
The company expects revenue in the range of $9 billion to $9.4 billion for the first quarter, compared with analysts’ average estimate of $9.9 billion, according to data compiled by LSEG.
HPE’s server revenue for the three months ended October 31 fell 5% to $4.5 billion, impacted by the timing of AI service shipments and lower-than-expected U.S. federal spending.
Revenue at its hybrid cloud segment fell 12% to $1.41 billion.
Total revenue for the quarter stood at $9.68 billion, below estimates of $9.94 billion.
HPE raised its fiscal 2026 adjusted earnings per share expectations to be in the range of $2.25 to $2.45, from prior projection between $2.20 and $2.40.
(Reporting by Juby Babu in Mexico City; Editing by Krishna Chandra Eluri)
Comments