HPE Reports Disappointing Margins on AI Server Business
- Investors fear expensive chips will hamper profit from servers
- Company reports best year-over-year sales gain since 2023
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Hewlett Packard Enterprise Co. reported weaker-than-expected margins, suggesting lower profitability than anticipated in its closely watched business of selling servers for artificial intelligence work.
Fiscal third-quarter adjusted gross margins were 31.8%, a decline from the period a year ago, the company said Wednesday in a statement. Analysts, on average, estimated 33.4%. The decline was driven by a “higher mix of AI server revenue,” Chief Financial Officer Marie Myers said on a call with analysts after the results were released.