HP Enterprises Said To Have Snagged $1B AI Server Contract From Elon Musk’s X, Outbidding Dell, Super Micro: Retail Gears For Strong Stock Rally
HP Enterprises may have secured the contract due to its liquid-cooling tech but large contracts could be a drag on margins, Bloomberg said.
Hewlett-Packard Enterprise Company ($HPE) has reportedly trumped over peers Dell Technologies, Inc. ($DELL) and Super Micro Computer, Inc. ($SMCI) in securing a plum contract from Elon Musk-owned social-media platform X.
HP Enterprise won a contract valued at over $1 billion to supply X with servers optimized for artificial intelligence (AI) work, Bloomberg reported Friday. The former reportedly declined to comment about the contract win.
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The company may have clinched the deal due to its liquid-cooling technology but larger deals could be a drag on margins, the report said.
Musk’s AI startup - xAI is currently building a supercomputer project in Memphis using a mix of Dell and Super Micro servers.
The report noted that Musk’s companies, including electric-vehicle maker Tesla, X, and xAI, share employees, computing power and employees. xAI’s flagship product Grok, a chatbot, is made available for paying customers of X.
HP Enterprises’ fiscal year fourth-quarter results released in early December showed 15% year-over-year (YoY) revenue growth to $8.5 billion, with annual recurring revenue rising 49% to $1.9 billion. Server revenue accounted for roughly 55% of the total and rose 32%. CFO Marie Myers said on the earnings call that the company recorded the highest-ever AI server revenue of $1.5 billion during the quarter.
‘’We expect continued recovery in traditional compute and growing adoption of AI systems by enterprises and sovereigns, although we expect orders to remain competitive and lumpy,’’ she said.
Sentiment toward HP Enterprises stock on Stocktwits has stayed ‘bullish’ (56/100), while message volume tapered to ‘normal.’
A HP Enterprises stock watcher on the platform said the stock could rally to $25, leveraging enterprise IT solutions demand.
Another said the stock is undervalued and could hit $30 on Monday.
HP Enterprises stock rallied over 29% in 2024 and has added an incremental 3.4% this year.
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