Hardware & Infrastructure Stocks Q2 Teardown: Hewlett Packard Enterprise (NYSE:HPE) Vs The Rest

Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Hewlett Packard Enterprise (NYSE:HPE) and its peers.

The Hardware & Infrastructure sector will be buoyed by demand related to AI adoption, cloud computing expansion, and the need for more efficient data storage and processing solutions. Companies with tech offerings such as servers, switches, and storage solutions are well-positioned in our new hybrid working and IT world. On the other hand, headwinds include ongoing supply chain disruptions, rising component costs, and intensifying competition from cloud-native and hyperscale providers reducing reliance on traditional hardware. Additionally, regulatory scrutiny over data sovereignty, cybersecurity standards, and environmental sustainability in hardware manufacturing could increase compliance costs.

The 9 hardware & infrastructure stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 3.8% while next quarter’s revenue guidance was in line.

Luckily, hardware & infrastructure stocks have performed well with share prices up 11.3% on average since the latest earnings results.

Hewlett Packard Enterprise (NYSE:HPE)

Born from the 2015 split of the iconic Silicon Valley pioneer Hewlett-Packard, Hewlett Packard Enterprise (NYSE:HPE) provides edge-to-cloud technology solutions that help businesses capture, analyze, and act upon their data across hybrid IT environments.

Hewlett Packard Enterprise reported revenues of $9.14 billion, up 18.5% year on year. This print exceeded analysts’ expectations by 6.5%. Overall, it was a strong quarter for the company with a solid beat of analysts’ ARR and EPS estimates.

Interestingly, the stock is up 6.9% since reporting and currently trades at $24.43.

Is now the time to buy Hewlett Packard Enterprise? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q2: Pure Storage (NYSE:PSTG)

Founded in 2009 as a pioneer in enterprise all-flash storage technology, Pure Storage (NYSE:PSTG) provides all-flash data storage hardware and software that helps organizations manage their data more efficiently across on-premises and cloud environments.

Pure Storage reported revenues of $861 million, up 12.7% year on year, outperforming analysts’ expectations by 1.7%. The business had a very strong quarter with a solid beat of analysts’ billings and EPS estimates.

The market seems happy with the results as the stock is up 42.9% since reporting. It currently trades at $87.

Is now the time to buy Pure Storage? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q2: Xerox (NASDAQ:XRX)

Pioneering the modern office copier and inventing technologies like Ethernet and the laser printer, Xerox (NASDAQ:XRX) provides document management systems, printing technology, and workplace solutions to businesses of all sizes across the globe.

Xerox reported revenues of $1.58 billion, flat year on year, exceeding analysts’ expectations by 1.6%. Still, it was a softer quarter as it posted a significant miss of analysts’ EPS estimates.

As expected, the stock is down 28.2% since the results and currently trades at $3.75.

Read our full analysis of Xerox’s results here.

IonQ (NYSE:IONQ)

Founded by quantum physics pioneers from the University of Maryland and Duke University in 2015, IonQ (NYSE:IONQ) develops quantum computers that process information using trapped ions to solve complex computational problems beyond the capabilities of traditional computers.

IonQ reported revenues of $20.69 million, up 81.8% year on year. This print surpassed analysts’ expectations by 21.5%. Overall, it was a strong quarter as it also logged full-year revenue guidance exceeding analysts’ expectations.

IonQ pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 76.3% since reporting and currently trades at $72.66.

Read our full, actionable report on IonQ here, it’s free for active Edge members.

NetApp (NASDAQ:NTAP)

Founded in 1992 as a pioneer in networked storage technology, NetApp (NASDAQ:NTAP) provides data storage and management solutions that help organizations store, protect, and optimize their data across on-premises data centers and public clouds.

NetApp reported revenues of $1.56 billion, up 1.2% year on year. This number topped analysts’ expectations by 0.9%. It was a satisfactory quarter as it also put up an impressive beat of analysts’ billings estimates.

NetApp had the weakest full-year guidance update among its peers. The stock is up 5.9% since reporting and currently trades at $118.72.

Read our full, actionable report on NetApp here, it’s free for active Edge members.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

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