Wrapping up Q4 earnings, we look at the numbers and key takeaways for the hardware & infrastructure stocks, including 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 10 hardware & infrastructure stocks we track reported a slower Q4. As a group, revenues beat analysts’ consensus estimates by 1.1% 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 26.1% 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 $7.85 billion, up 16.3% year on year. This print exceeded analysts’ expectations by 0.5%. Despite the top-line beat, it was still a slower quarter for the company with a miss of analysts’ EPS estimates.
The stock is down 21.7% since reporting and currently trades at $14.05.
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 $879.8 million, up 11.4% year on year, outperforming analysts’ expectations by 1.2%. The business had a satisfactory quarter with a solid beat of analysts’ EPS estimates but billings in line with analysts’ estimates.
Pure Storage scored the highest full-year guidance raise among its peers. The stock is down 30.4% since reporting. It currently trades at $43.44.
Pioneer of the luxury metal credit card that's in the wallets of affluent consumers worldwide, CompoSecure (NASDAQ:CMPO) designs and manufactures premium metal payment cards and secure authentication solutions for financial institutions and digital asset storage.
CompoSecure reported revenues of $100.9 million, flat year on year, falling short of analysts’ expectations by 1.6%. It was a disappointing quarter as it posted a significant miss of analysts’ EPS estimates.
As expected, the stock is down 22.5% since the results and currently trades at $9.31.
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 $1.61 billion, down 8.6% year on year. This print beat analysts’ expectations by 2.9%. Aside from that, it was a slower quarter as it produced a significant miss of analysts’ EPS estimates.
Xerox had the slowest revenue growth among its peers. The stock is down 56.9% since reporting and currently trades at $4.19.
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 $1.64 billion, up 2.2% year on year. This result came in 3.1% below analysts' expectations. Overall, it was a softer quarter as it also recorded a significant miss of analysts’ billings estimates and a miss of analysts’ full-year EPS guidance estimates.
NetApp had the weakest full-year guidance update among its peers. The stock is down 28.8% since reporting and currently trades at $84.25.
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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