Hewlett Packard Enterprise's Backlog of Nearly $6 Billion Is Fueled by a New Wave of AI Spending
Yahoo Finance ·
Hewlett Packard Enterprise ( HPE +2.76% ) has gone from a legacy hardware vendor to an artificial intelligence (AI) infrastructure player in a matter of months. The stock is up 81% year to date, and management recently raised full-year earnings guidance by over 40% after the company blew past expectations in the second quarter. While the first wave of AI infrastructure spending was dominated by hyperscalers building massive cloud data centers, the second phase is being driven by enterprises building their own on-premises AI capabilities. Running AI workloads with a variety of models on your own hardware is cheaper, and allows companies to protect their intellectual property, data, and competitive advantages. HPE's timely acquisition of Juniper Networks last year positioned it to benefit from this spending. Businesses are drawn to Hewlett Packard Enterprise's integrated approach, which combines servers, storage, and high-performance networking gear, allowing its customers to build AI factories they control. Running AI requires graphics processing unit (GPU) clusters and networking hardware that communicate without delays. If the network lags, expensive GPUs sit idle.
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