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HPE stock sinks 9% on revenue miss and weak server numbers

CNBC•December 05, 2025 at 2:45 PM•Full Content
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Gist

HPE stock dropped 9% after missing revenue expectations, driven by a decline in server sales due to delayed AI shipments and weaker government spending.

LLM Summary

Hewlett Packard Enterprise reported Q4 revenue of $9.68 billion, below the $9.94 billion expected by analysts, with server revenue falling 5% year-over-year and 10% from the prior quarter. Despite beating earnings estimates, the company lowered its guidance for the next quarter, citing timing of AI service deliveries and reduced government spending.

Full Article Content

Key Points

* Hewlett Packard Enterprise reported fourth-quarter revenue that missed analyst expectations.

* Revenue for HPE's server segment came in at $4.46 billion, down 10% from the prior quarter and down 5% from a year ago.

* CFO Marie Myers said server revenue was hit by the timing of AI service shipments and lower-than-expected government spending.

* HPE

Antonio Neri, President and CEO of Hewlett Packard Enterprise.

Anjali Sundaram | CNBC

Hewlett Packard Enterprise shares fell 5% Friday after the company reported fourth-quarter revenue that missed analyst expectations.

The company reported earnings after the bell on Thursday, posting revenue of $9.68 billion, which was up 14% over the year prior but fell short of the $9.94 billion in revenue expected by analysts polled by LSEG.

Revenue for HPE's server segment came in at $4.46 billion, down 5% from the $4.68 billion a year ago. The fourth-quarter number missed StreetAccount analyst expectations of $4.58 billion.

CFO Marie Myers addressed the shortfall on the analyst call Thursday, attributing it to the timing of artificial intelligence service shipments and lower-than-expected government spending.

"Despite these headwinds, we were encouraged by robust server order growth across both traditional server and AI offerings, with demand significantly outpacing revenue in this period," she said.

Server revenue declined 10% from the third quarter.

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HPE beat earnings expectations with adjusted earnings of 62 cents per share, coming in above the 58 cents per share expected by LSEG.

The company expects fiscal 2026 first-quarter revenue in the range of $9 billion to $9.4 billion, which was short of the $9.87 billion expected by FactSet analysts.