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

Yeah, good morning Ed and thanks for having me. We saw tremendous demand throughout the quarter. I think the momentum in AI continues in the buildout 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 recognized 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. 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 the enterprise space. But in our portfolio we saw tremendous momentum in networking. Our strategy with Juniper has paid off and that's why we see double digits year-over-year growth in the order intake.

Well, I do believe Ed and this was the core thesis of the Juniper acquisition that the next inflection point in term of disruption will come from the networking connectivity layer. Think about when you build a data center, you have to connect this data center to other data centers through the internet. And that's what we call data center 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 switching portfolio in addition to some of the other core tenants of the technology. And there 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 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 their 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.

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 hypers cycle we see in the AI space. But fundamentally in our guidance, the new guidance, the new outlook that we raise 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 cycle will continue well into 2027 although we will hope that we will reach some sort of elevated pricing 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.