Hewlett Packard Enterprise Reports Strong Q3 Results Amid $7.6 Billion AI Backlog
Hewlett Packard Enterprise (NYSE: HPE) reported record third-quarter results, with revenue rising 34% year-over-year to $12.2 billion and adjusted earnings increasing by 152%. The company raised its full-year outlook due in part to strong AI server demand, which pushed the backlog for AI systems to $7.6 billion. Despite robust order growth, HPE faces supply chain constraints related to memory and storage components that are limiting shipments. CEO Antonio Neri noted ongoing supply issues will likely persist into 2027, affecting costs and pricing dynamics. Networking orders grew by 36%, but revenue only increased by 10% due to limited product availability. Server revenue rose sharply on higher average selling prices driven by input cost increases. HPE's networking segment is expected to help offset margin pressures from AI systems as it carries higher profitability. HPE has secured long-term supply agreements for memory and anticipates component shortages will ease in the current quarter, allowing orders to convert into shipments more effectively.
Topics: AI Infrastructure Backlog Growth Gross Margins Server Demand