Investing.com - Shares in Hewlett Packard Enterprise (NYSE:HPE) surged by more than 15% in early U.S. trading Wednesday after the company reported better-than-expected quarterly results.
The company posted second-quarter earnings per share of $0.42, above projections of $0.39. Revenue of $7.2 billion also surpassed consensus estimates of $6.83 billion.
Sales of HPE's artificial intelligence servers more than doubled quarter-over-quarter to over $900 million, reflecting a boom in enthusiasm around the nascent technology. Overall server sales increased by 17.6% to $3.87 billion.
Commenting on the report, JPMorgan analysts said HPE delivered "an unexpectedly good quarter" with management "posting a nice beat and telling an exciting AI story."
"HPE didn't come up in industry conversations, and even a month ago it would be hard to imagine they would do $900m in AI revenue, and it feels like bulls think the company is guiding conservatively," they added.
Elsewhere, Stifel analysts raised their price target for HPE shares to $22 from $18.
Looking ahead, HPE guided for annual earnings per share (EPS) of $1.85 to $1.95, compared with Wall Street projections of $1.88. For its fiscal third quarter, HPE anticipates EPS of $0.43 to $0.48 and revenue between $7.4 billion and $7.8 billion.