HP and HP Enterprise Look to Future With AI Plans

HP reported its lowest quarterly revenue since the start of the Covid-19 pandemic, reflecting continued weakness in the personal computer market. But it sees market conditions improving in the second half of the year, and laid out a vision of playing a key role in artificial intelligence.

HP foresees a “new PC architecture” that would be capable of running AI workloads without use of the cloud. Most AI services now rely on cloud computing. Running AI locally will reduce latency and improve security, and HP’s first PCs of that variety should start to appear in 2024.
The PC maker reported revenue of $12.9 billion for the April quarter, down 21.7% from a year ago and below expectations. Adjusted earnings per share of 80 cents beat the Street consensus. PC sales fell 29% from one year ago.
HP sees July quarter adjusted earnings of 81 cents to 91 cents a share. For full-year fiscal 2023, which ends in October, it projects adjusted earnings in a range of $3.30 to $3.50 a share, and PC sales are expected to improve.
Hewlett Packard Enterprise, the maker of servers and network devices, is also leaning in on AI. It reported mixed results for the April quarter but outlined a rapidly expanding opportunity in demand for computing power to run generative AI applications.

What’s Next: HP Enterprise revenue rose 4% from a year ago, up 18% in its AI unit. For the July quarter, the company sees revenue of $6.7 billion to $7.2 billion and adjusted profit of 44 to 48 cents as it continues to shift to higher-margin products.

—Eric J. Savitz and Liz Moyer from Barrons