HP Enterprise CEO Antonio Neri Talks Revenue, Memory Demand and Supply

Summary

Episode Summary: HP Enterprise CEO Antonio Neri Talks Revenue, Memory Demand, and Supply

Podcast: Bloomberg Talks
Date: March 10, 2026
Host/Interviewers: Ed, Carol (Bloomberg)
Guest: Antonio Neri, CEO of HP Enterprise

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Overview

This episode centers on HP Enterprise's (HPE) robust financial performance, booming demand for AI hardware, and the operational challenges posed by supply chain constraints—especially around memory and networking. CEO Antonio Neri offers insider perspective on HPE's strategic positioning, product demand, pricing discipline, and the impact of geopolitical factors on supply logistics.

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Key Discussion Points & Insights

AI Hardware Demand & Enterprise Growth

• AI as the Growth Engine:
  • HPE saw "tremendous demand throughout the quarter," with most AI-related revenue in Q1 coming from the enterprise segment, not just hyperscale or sovereign clients.
  • Quote:

    "Most of our revenue in AI that we recognize in Q1 came from the Enterprise segment, which shows you two key elements. One is the adoption of Agentic AI into the company's workflow and second is the growing of inferencing." (Antonio Neri, 01:11)

• Focus on Inferencing and Sovereign Space:
  HPE aims to capitalize on both AI training and, increasingly, inferencing workloads, especially as adoption widens in traditional enterprises.

Networking as a Strategic Win

• Post-Juniper Acquisition Upside:
  • Networking is emerging as a key area of growth, thanks to the Juniper acquisition.
  • Significant order intake:
    • Juniper's routing products saw "mid 20%" growth,
    • Switching products "grew mid 40%" in order intake.
  • Quote:

    "Now [networking] represent almost 30% of the company revenues, but more than half of the profit." (Antonio Neri, 02:23)

  • High structural margins and capital efficiency in networking allow HPE to raise its annual outlook and free cash flow guidance.

Navigating Supply Chain & Memory Shortages

• Memory & Component Constraints:
  • Surging demand for AI systems is outpacing supply, particularly for DDR (memory) and NAND/SSD components.
  • HPE is currently unable to fulfill all incoming orders due to shortages.
  • Quote:

    "We do not have enough supply against the order intake and the backlog, because otherwise we'll have even a higher outlook." (Antonio Neri, 03:56)

• Strategic Responses:
  • Securing maximum available supply
  • Dynamic, agile pricing (with ongoing price increases expected to continue "well into 2027")
  • Direct, transparent conversations with customers—valued by clients during volatility
    • Quote:

      "I met more than 20 customers at the Mobile Congress in London. And they appreciate that level of transparency, understanding the environment we're in." (Antonio Neri, 04:49)

• Component-Specific Bottlenecks:
  • DDR5 (the latest generation of memory) and NAND-based SSDs are most constrained.
  • HBM is less of a constraint but under transition, which creates procurement complexity.
  • Quote:

    "[The biggest impact] is DDR and NAND... the allocation on the capacity has moved there... DDR5 and the NAND part, which is the SSD." (Antonio Neri, 07:11)

• Supplier Relationships:
  • Long-standing engagements with three core DDR/HBM suppliers, broader supplier base for NAND.
  • Weekly discussions aiming to swap components and drive alternate configurations.

Geopolitical Factors & Global Strategy

• Middle East Complexity:

  • No current supply impacts from Iran conflict, but logistics could be affected if the conflict drags on.
  • Priority on HPE employee safety (1,000 staff in the region).
  • Quote:

    "From a supply perspective, no [impact]. But obviously as the conflict may get elongated, may have all the implications particularly on the logistics side... Air freight routes are a little bit more complicated." (Antonio Neri, 05:48)

• Selective Supply Decisions:

  • In some cases, HPE is deliberately choosing not to supply certain mobile service providers to manage inventory against geopolitical uncertainties and supply shortage.

Revenue & Financial Outlook

• Strong Projections and Large Backlog:
  • HPE gave a strong revenue projection and raised free cash flow outlook by almost $200 million at midpoint.
  • The AI systems backlog stands over $5 billion; networking for AI goals raised.
  • Quote:

    "If you think about the AI system backlog is over 5 billion. We raise again the network... for AI goal for the year. So it's a very sizable backlog... we categorize this as a prudent guidance at this point in time." (Antonio Neri, 08:33)

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Notable Quotes & Memorable Moments

• Ed’s Technical Curiosity:

  "Antonio, you have never let me tear apart an HP server and that's okay. But if I got my hands in the compute tray, you'd have the high bandwidth memory around the GPU wherever it comes from. You'd have the DDRs around the CPU and somewhere you'd have the SSDs NAND flash memory. Be very, very specific. Of those three, what's the biggest impact to you right now...?" (Ed, 06:44)

• Antonio’s Supply Chain Reality:

  "...the reality all of them are significantly constrained." (Antonio Neri, 07:57)

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Important Timestamps

• [01:11] – HPE’s AI revenue momentum in enterprise, adoption of Agentic AI, focus on inferencing
• [02:23] – Juniper acquisition impact, networking order growth, profitability
• [03:56] – Memory supply constraints, agile pricing, guidance for 2026-2027
• [05:48] – Middle East impact, employee safety, and supply chain logistics
• [07:11] – Component shortages: DDR5, NAND (SSDs), market transition notes
• [08:33] – Quantifying the size of the AI backlog and prudent financial guidance

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Conclusion

Antonio Neri's conversation with Bloomberg reveals HPE’s strategic pivots in an AI-driven market: networking is the standout profit engine post-Juniper, memory supply shortages are a major limiting factor, and agility in pricing plus honest communication with customers define the company’s operational approach. While global unrest and supply chains pose continuing risks, HPE leans into its backlog and enterprise AI demand as it looks ahead to a robust year.

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Transcript

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[Ed (Interviewer)]

Shares of HP modestly higher, up about 6/10 of 1%. Been chopping around in the session, but the company gave a strong sales and revenue projection for the current quarter. What's driving it? Demand. Demand for AI hardware in particular. Let's discuss with HP CEO Antonio Neri. Start with that. You know, clearly there is some staying power in that demand at rack scale. You know, crystallize it for us. What are you seeing in real time?

[Antonio Neri]

Yeah, good morning Ed, and thanks for having me. We saw tremendous demand throughout the quarter. I think the momentum in the eye continues in the build out of the data center. But what I'm really pleased is the momentum we see in enterprise. In fact, most of our revenue in AI that we recognize in Q1 came from the Enterprise segment which shows you you two key elements. One is the adoption of Agentic AI into the company's workflow and second is the growing of inferencing. A lot of focus is always around the training and you know, training these new models. But for us our focus has been both the sovereign space and the inferencing and enterprise space. But in our portfolio we saw tremendous momentum in networking. Our strategy with journeys has paid off and that's why we see double digits year over year growth in the order intake.

[Ed (Interviewer)]

You know, post Juniper networking is, is, is upside for you, right? I think you have a lot of confidence that growth will come in networking for the audience that doesn't understand what it is you do in that space. Why is networking on the rise in parallel with just kind of the broader AI hardware demand that you're seeing?

[Antonio Neri]

Well, I do believe, and this was the core thesis of the Juniper acquisition, that the next inflection point in terms of disruption will come from the networking connectivity la. Think about when you build a data center. You have to connect this data center to all the data centers through the Internet and that's what we call datacenter Interconnect. Juniper has one of the most innovative products in the routing space. By the way, this past quarter we grew mid 20% in the order intake. And then once you are inside the data center, you need to be able to connect large amount of GPUs and CPUs together. And that's where you need the data center, data center switching portfolio in addition to some of the other core tenants of the technology. And they are, you know, the juniper portfolio grew mid 40% in the order intake. So I will say for us, that has been a core tenant. That's why, you know, now they represent almost 30% of the company revenues, but more than half of the profit. And for us, that's also an ability to raise the outlook for the remainder of the year and also the outlook in free cash flow because the structural margins of that business and the working capital efficiency are very, very different than the rest of the portfolio.

[Carol (Interviewer)]

I mean, you actually said you're not done raising prices. You talk about discipline in what is a very dynamic environment. Antonio, talk to us about how you're weathering the supply chain issue. In particular the cost, the memory costs at the moment. How do you navigate that?

[Antonio Neri]

Yeah, I mean, obviously the demand and supply has a huge mismatch and you actually need to go back all the 22, 23 time frame to understand how we got here accelerated by the hypercycle we see in the space. But fundamentally in our guidance, the new guidance, the new outlook that we raised for 2026, we included our ability to see the supply that we need to convert that into revenue and profit. But the reality is that we do not have enough supply against the order intake and the backlog because otherwise we'll have even a higher outlook. So what we're doing, we have taken three very unique steps. Number one is securing as much supply as we can. But again, we don't have all the supply that we would like to have. Number two is taking a very agile posture when it comes down to pricing. And as I said yesterday, we are not done raising pricing. I think that that cycle will continue well into 2027, although we will hope that we will reach some sort of elevated pricing step stability in 2026. And number three, you know, my experience have taught me that ultimately you need to have direct, transparent conversation both with customers and our partners. Last week I was in Europe. I met more than 20 customers at the Mobile Congress in London. And they appreciate that level of transparency, understanding the environment we're in.

[Carol (Interviewer)]

I mean, you're actually foregoing supplying some equipment to mobile service providers. So you're being choosy with who you work with at this time of geopolitical angst. And when we question how much the Middle EAS east is going to be able to build out the data center capacity as we'd once thought. Has the Iran conflict impacted your view on the world or indeed the supply of the world and chips not on

[Antonio Neri]

the supply side, Carol. And obviously our first priority because we have businesses in that region, whether you Qatar, Bahrain, Saudi Arabia, Israel. Right. Is the well being, the safety of our employees. We have approximately 1,000 employees in that region and the good news, all are doing well at this point in time. But from a supply perspective, no. But obviously as the the conflict may get elongated, may have all the implications particular on the logistics side of the equation. You know, look, air freight routes are a little bit more complicated. We don't use boats or ships for transporting our equipment. But over time we have to assess if there is a revenue impact. What I can tell you right now, there is even more, more demand than we saw particularly three or four months ago. So we have to navigate that together and we have to be smart about it.

[Ed (Interviewer)]

Antonio, you have never let me tear apart an HP server and that's okay. But if I got my hands in the compute tray, you'd have the high bandwidth memory around the GPU wherever it comes from. You'd have the DDRs around the CPU and somewhere you'd have the SSDs NAND flash memory. Be very, very specific. Of those three, what's the biggest impact to you right now in constraining your sales and your outlook Very simply is

[Antonio Neri]

DDR and NAND or the SSDs HB's less constrained. But obviously a lot of the allocation on the capacity has moved there. And as you know there is also transition from the prior generation of HBM to the new generation of HBM because you need more memory channels but is really the DDR4 and which now nobody almost use it but DDR5 and the NAND part, which is the SSD you said just earlier.

[Carol (Interviewer)]

Look you. One of your three key steps you took was to get as much supply as you could and to ensure that that was locked in. You wish you could have more. Who is it that you need to push more? Who is it that you need to have more security for? How can you perhaps get hands on further supply going forward?

[Antonio Neri]

Look, we have a long standing relationship with the three core suppliers that provide DDR memory and HBMs. And there is a little bit larger ecosystem for the NAND space. But we have in weekly engagements with them. We are looking to swap components driving different configurations, but the reality all of them are significantly constrained.

[Ed (Interviewer)]

Caroline Antonio, just 20 seconds. What's the dollar figure dollar terms of what was left on the table, how much better the outlook could have been?

[Antonio Neri]

Yeah, it's pretty sizable, I will say. You know, we guided five pennies on the midpoint of the range and then we raise our outlook for free cash flow by almost 200 million at the midpoint. But the backlog is very, very large at this point in time. If you think about the AI system backlog is over 5 billion. We raise again the network in for networks for AI goal for the year. So it's a very sizable backlog. So we hope we make progress as we go along, but we categorize we level this as a prudent guidance at this point in time.

[Carol (Interviewer)]

Antonio Neri, CEO of HP thanks for the candid conversation. We appreciate it.

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