Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Hewlett Packard Enterprise (NYSE: HPE) and the best and worst performers in the hardware & infrastructure industry.

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 strong Q3. As a group, revenues beat analysts’ consensus estimates by 3.6% while next quarter’s revenue guidance was in line.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 9.1% 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 $9.68 billion, up 14.4% year on year. This print fell short of analysts’ expectations by 2%. Overall, it was a mixed quarter for the company with a solid beat of analysts’ ARR estimates but revenue guidance for next quarter missing analysts’ expectations significantly.

“HPE finished a transformative year with a strong fourth quarter of profitable growth and disciplined execution,” said Antonio Neri, president and CEO of HPE.

Interestingly, the stock is up 6.2% since reporting and currently trades at $24.47.

Read our full report on Hewlett Packard Enterprise here, it’s free for active Edge members.

Best Q3: 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 $39.87 million, up 222% year on year, outperforming analysts’ expectations by 47.8%. The business had an incredible quarter with a beat of analysts’ EPS and revenue estimates.

IonQ scored the biggest analyst estimates beat and fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 16.8% since reporting. It currently trades at $46.13.

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

Weakest Q3: HP (NYSE: HPQ)

Born from the legendary Silicon Valley garage startup founded by Bill Hewlett and Dave Packard in 1939, HP (NYSE: HPQ) designs and sells personal computers, printers, and related technology products and services to consumers, businesses, and enterprises worldwide.

HP reported revenues of $14.64 billion, up 4.2% year on year, exceeding analysts’ expectations by 0.7%. Still, it was a slower quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates and a slight miss of analysts’ EPS guidance for next quarter estimates.

As expected, the stock is down 4% since the results and currently trades at $23.31.

Read our full analysis of HP’s results here.

Super Micro (NASDAQ: SMCI)

Founded in Silicon Valley in 1993 and known for its modular "building block" approach to server design, Super Micro Computer (NASDAQ: SMCI) designs and manufactures high-performance, energy-efficient server and storage systems for data centers, cloud computing, AI, and edge computing applications.

Super Micro reported revenues of $5.02 billion, down 15.5% year on year. This result missed analysts’ expectations by 13.2%. It was a slower quarter as it also logged a significant miss of analysts’ revenue estimates and a significant miss of analysts’ operating income estimates.

Super Micro had the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update among its peers. The stock is down 36.5% since reporting and currently trades at $30.46.

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

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 $964.5 million, up 16% year on year. This print topped analysts’ expectations by 0.9%. Taking a step back, it was a satisfactory quarter as it also recorded a solid beat of analysts’ billings estimates but EPS in line with analysts’ estimates.

The stock is down 27.4% since reporting and currently trades at $68.86.

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

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

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