Wrapping up Q2 earnings, we look at the numbers and key takeaways for the hardware & infrastructure stocks, including HP (NYSE:HPQ) 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.
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 print exceeded analysts’ expectations by 1.2%. Despite the top-line beat, it was still a mixed quarter for the company with EPS guidance for next quarter in line with analysts’ estimates.
Unsurprisingly, the stock is down 2% since reporting and currently trades at $26.59.
Is now the time to buy HP? Access our full analysis of the earnings results here, it’s free.
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, outperforming analysts’ expectations by 1.7%. The business had a very strong quarter with an impressive beat of analysts’ billings and EPS estimates.
The market seems happy with the results as the stock is up 45% since reporting. It currently trades at $88.25.
Is now the time to buy Pure Storage? 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.
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. This number beat analysts’ expectations by 6.5%. Overall, it was a strong quarter as it also recorded a solid beat of analysts’ ARR and EPS estimates.
The stock is up 7.2% since reporting and currently trades at $24.50.
Read our full, actionable report on Hewlett Packard Enterprise here, it’s free.
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 $20.69 million, up 81.8% year on year. This result surpassed analysts’ expectations by 21.5%. Overall, it was a strong quarter as it also produced full-year revenue guidance exceeding analysts’ expectations.
IonQ achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 69.7% since reporting and currently trades at $69.96.
Read our full, actionable report on IonQ here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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