HPE's $7.6 Billion AI Backlog Is Waiting on Memory Supply to Catch Up
The company's enterprise and government customers are driving a surge in AI orders.
Overview
Hewlett Packard Enterprise (NYSE: HPE) supplies the servers, networking gear, and storage that businesses and governments need to run artificial intelligence (AI) applications in their own data centers. The company reported record third-quarter results last week, leading management to raise its full-year outlook. HPE also bumped up its fiscal 2027 guidance, projecting at least $5 billion in free cash flow for the year.
In Q3, revenue grew 34% year over year to $12.2 billion, and adjusted earnings jumped 152% to $1.11 per share, driven in part by higher gross margins. Management expects margins to settle at lower levels as AI systems account for a larger share of shipments. Total AI orders of $3.1 billion in the quarter pushed the backlog to $7.6 billion, and bookings for traditional servers were up 75% as customers purchased AI-enabled hardware.
Details
With demand at record highs, backlog growth is outpacing actual shipments as memory and storage drives remain in short supply. That suggests new investment potential for this veteran tech giant.
Source
Originally published at www.fool.com.