As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the hardware & infrastructure industry, including Pure Storage (NYSE:PSTG) 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 9 hardware & infrastructure stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 3.8% while next quarter’s revenue guidance was in line.
Luckily, hardware & infrastructure stocks have performed well with share prices up 11.4% on average since the latest earnings results.
Best Q2: 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 $861 million, up 12.7% year on year. This print exceeded analysts’ expectations by 1.7%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ billings and EPS estimates.
"Our strong second quarter results demonstrate ever more customers' confidence in the value of the Pure Storage platform to advance their data storage and management now and into the future," said Pure Storage CEO and Chairman Charles Giancarlo.
Interestingly, the stock is up 45% since reporting and currently trades at $88.25.
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 $9.14 billion, up 18.5% year on year, outperforming analysts’ expectations by 6.5%. The business had a strong quarter with a solid beat of analysts’ ARR and EPS estimates.
The market seems happy with the results as the stock is up 7.2% since reporting. It currently trades at $24.50.
Is now the time to buy Hewlett Packard Enterprise? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Xerox (NASDAQ:XRX)
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 $1.58 billion, flat year on year, exceeding analysts’ expectations by 1.6%. Still, it was a softer quarter as it posted a significant miss of analysts’ EPS estimates.
As expected, the stock is down 27.6% since the results and currently trades at $3.78.
Read our full analysis of Xerox’s results here.
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 $13.93 billion, up 3.1% year on year. This result surpassed analysts’ expectations by 1.2%. Taking a step back, it was a mixed quarter as it also produced EPS guidance for next quarter in line with analysts’ estimates.
The stock is down 2% since reporting and currently trades at $26.59.
Read our full, actionable report on HP here, it’s free.
Diebold Nixdorf (NYSE:DBD)
With roots dating back to 1859 and a presence in over 100 countries, Diebold Nixdorf (NYSE:DBD) provides automated self-service technology, software, and services that help banks and retailers digitize their customer transactions.
Diebold Nixdorf reported revenues of $915.2 million, down 2.6% year on year. This number beat analysts’ expectations by 3.3%. Aside from that, it was a slower quarter as it logged a significant miss of analysts’ EPS estimates.
Diebold Nixdorf had the slowest revenue growth among its peers. The stock is up 1.6% since reporting and currently trades at $57.22.
Read our full, actionable report on Diebold Nixdorf here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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