HPE predicts sales to exceed demand forecast for AI hardware

issued Tuesday, March 10, 2026 · 06:18 AM

[SEATTLE] Hewlett Packard Enterprise (HPE) provided current quarter earnings guidance that beat analysts’ expectations. This shows the company is benefiting from strong demand for hardware that helps customers run artificial intelligence (AI) workloads.

The company said on March 9 that it expected revenue of $9.6 billion to $10 billion for the period ending in April, compared with the average estimate of $9.57 billion of analysts surveyed by Bloomberg. HPE said earnings excluding certain items were in the range of US$51 to US$55 per share, in line with average expectations of US$53.

The company reiterated its full-year sales growth outlook and raised its full-year profit forecast to $2.30 to $2.50 per share. Analysts’ average estimate was $2.35.

HPE is seeing strong demand for its networking products due to the boom in AI tasks that require faster ways to route data. The Texas-based company acquired Juniper Networks last year for about $13 billion and sees networking as a key part of its future expansion.

HPE boosted profits in the most recent quarter by raising prices and cutting supplies to some customers as the industry grappled with severe price increases and a shortage of memory chips.

“We operated with very, very strong discipline in a very dynamic environment caused by supply chain shortages and inflationary costs,” said CEO Antonio Neri.

First-quarter sales rose 18% to $9.3 billion, with earnings excluding items of $65 per share. Analysts had expected sales of US$9.37 billion and profit of US$58.

Cloud and AI revenue, which includes servers and storage, fell 2.7% to $6.3 billion, but the segment’s margins expanded. Neri said the company has a $5 billion backlog on its AI servers.

Shares were little changed in extended trading after closing in New York at $21.81. The company’s stock price has fallen 9.2% since the beginning of the year.

HPE expects the memory chip shortage to continue into next year. In some cases, the company raises prices between the time it posts a price and the time it ships the product. HPE is also holding off on supplying some equipment to mobile service providers as it focuses on high-revenue customers such as enterprise customers and sovereign trades.

“The price increases are not over yet,” Neri said. Still, HPE hasn’t really lost market share, he added.

“Depending on the opportunity, some markets, segments and products may gain share, while others may lose share,” he said. “But on average, we’re all in the same position.”

The company is also vying for more contracts with countries that are building their own AI clouds, but those contracts take time to sign and receive U.S. export control approval, so revenue likely won’t show up until later this year, Neri said. bloomberg