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Can we just look at it skyrocketing this morning as we see it surge after second quarter results beat expectations. It raised it's fully of forecast where sales could jump by an entire one third after thirty three percent. That growth is being fueled, you know why, by massive demand for AI infrastructure joining us. Now, HPU presidentco Antonio and Ery, you're up twenty one percent.
You have let to a record high on the stock.
It is a record move for the stock and you've added thirteen billion dollars in market cap. Just reflect for a moment on what people are calling a blowout quarter.
Yeah, well, good morning, Caroline. Was an exceptional quarter. I just said, right, we achieve a record break results a number of key metrics. We have tremendous demand across our portfolio or portfolio is an intersectional networking, cloud and AI
and the demand is durable. And therefore, you know, thanks to the results of the first half, the tremendous record breaking backlog that we have the pipeline which remains multiples of that backlog allow us to raise their twenty six guide and to provide twenty twenty seven guide six months ahead because of that durability. So we're very, very proud of.
This moment, Antonio. This is a story about demand right an outlook and it's through HPES lens a revenue figure. But I think there's a lot of value if you could talk us through whether that outlook for twenty six and then the twenty seven outlook, which you say is evidence of durability, is a volume story or it's a pricing story. In other words, no great volume of servers more than you normally do, you can just charge a lot more for them.
Well, first of all, when we talk about the outlook, we are actually pulling by two years the twenty eight outlook that we provided last October, and the security anitor is meet in intra twenty twenty six. And to give us sense, you saw that our armies per share at the midpoint will be three dollars and forty cents, which
is a dollar higher than the previous guidance. And at the core of that is our networking story and the improvements we have made across the entire portfolio, a combination of course of volume in the key products emits, whether it's campus and branch which is up almost thirty percent in orders, so the routing business, so the data center switching business orders which is our close to twenty percent.
And then on the server side of the equation, we are up triple digits in demand storage for the six consecutive quarter triple digits. And our private cloud portfolio, which obviously has the AI factory for enterprise, continues to growth. So it is a volume story with very discipline prency in execute.
I mean talking about discipline the father operating profit you see going to eighty to eighty five percent growth for the fiscal full year. And this in the context of memory prices, just going through the roof, how are you able to navigate what could be a significant pricing pressure bottlenecks. Still, there's a lot still to give me a little bit anxious about Antonio.
What could disrupt this?
Well, we need to go underneath the portfolio and look at the mixed cattle and because now with an eleven billion dollar business in networking clearly drives a different mix in a gross margin which was record thirty six point nine percent. Let's not forget that we are ahead of plan in the Juniper and Catalyst initiatives Bob Milestone says,
synergy that fuels costal seals improvements and opics improvements. And then you have, of course you have the cost increases in d RAM and A nand But fundamentally there is all about the demand. I have to tell you and A this yesterday. Customers need access to this technology. You guys have covered extremely well the AI momentum involve in the buildout, but we were very pleased to see the acceleration and enterprise which is driven by that option, especially in AI infanancy.
There are lots of things happening on premise back hybrid cloud. As we just discussed with perplexity, is becoming increasingly important in your outlook or even in the court of gone. Was this a story about one big customer that changed the trajectory for you or are you seeing new types of customer? It's not just a hyperscaleer story anymore.
Now.
We have been very selectively playing in the AI at scale in terms of profitability as well as working capital. Because we need a lot of working capital. We have prioritized pain down the debt and making sure we drive the profitable growth tour networking cloud NAI in enterprise and sovereign and influencing. So this is not one customer, this
is a number of many, many customers. I spoke yesterday about some of the customers that we are winning that are bringing that infrastructure on premise because for compliance reasons, governance reasons, data privacy reasons, security reasons, they need to do on premise. And I give an example of my own use case. We inside HP we have twelve hundred AI use cases, of which two hundred and fifty are
in production. We actually use a combination of proprietary or close models and open models, and we have very stringent governance, and we do it on premise, and we see that trend happening across the enterprise more and more.
I'm going to be very dry and very specific with you, Antonio. Is this an enterprise supercycle or is this something different where agentic ai leads to a complete structural shift on how all kinds of companies chang in their spending habits. What do you see is.
The ladder And I think you know AI enterprise will accelerate, But the reality is that agentic AI is transforming the way we do business, is transforming business processes, workflows, and is making companies more agile and efficient. So that's what we see today and I think we are early in the enterprise adoption and I think, you know, customers now want to make sure they are not left behind. We have a say inside the company, and the future belongs to the fast and so you got to move really fast.
And we learn a lot through the COVID right through the own ramp to digital. So is the ladder and I'm enthusiastic about this because it really helped customers to be more competitive in the market, which ultimately is the teas is about the productivity.
It's about productivity and many worry that means few jobs.
That means change in labor.
Have you seen any changes the way in which you're hiring, Maybe you don't need as many employees. What do you think about the narrative?
Well, definitely, the type of roles you're hiring is different. But inside the company, we have a very aggressive talent development succession plan. In fact, this afternoon, I'm going to have a session with my entire team about that. But the skill sets of the future have to evolve, and you know, I always remind our sixty five thousand employees to use this technology in their favor to become more productive.
And I believe everyone everyone including yourselves as anchors. To be you have to have a minor in AI, have to use the technology is going to be a competitive advantage in every role across an enterprise.
Were using the technology. HPE President and CEO Antony and Area back on Bloomberg Tech. Thank you very much