(Reuters) - Hewlett Packard Enterprise (NYSE:HPE) beat Wall Street expectations for fourth-quarter revenue and profit on Thursday, as it benefits from strong demand for its servers used to power artificial intelligence applications.
Shares of the company rose around 1.5% in extended trading.
Demand for HPE's servers, equipped with Nvidia (NASDAQ:NVDA) processors, has remained healthy as enterprises invest heavily in hardware that can support and process the swathes of data used in training AI models.
Despite a weaker performance, HPE has been seeing an improvement in its Intelligent Edge business, which provides networking hardware such as switches and Wi-Fi access points.
Intelligent Edge revenue fell 20% to $1.12 billion in the fourth quarter.
HPE finalized a deal at the start of the year to acquire networking equipment maker Juniper Networks (NYSE:JNPR), in a move to boost its networking market share in a competitive industry.
Total (EPA:TTEF) revenue for the fourth quarter came in at $8.46 billion, beating estimates of $8.26 billion, as per data compiled by LSEG.
Server revenue rose 32% to $4.71 billion in the quarter ended Oct. 31.
For the first quarter, HPE expects revenue to grow in the mid-teens percent, roughly in line with analysts' estimates.
On an adjusted basis, the company earned 58 cents per share, beating estimates of 56 cents apiece.