HP logs another challenging quarter
Mixed quarter at best for computer and printer giant HP Inc (HPQ).
The company continued to see pressure in its printing business, in part because of the ongoing work-from-home dynamic. Meanwhile, the AI PC ramp has yet to take hold and remains a lot of hype.
"HPQ results held signs of a PC market recovery in the strength of the Commercial PS segment being enough to offset the weaker revenue outcomes in Consumer PS as well as Print to deliver modestly better revenue in F3Q. However, the macro headwinds are driving softer results in the other segments, which is in turn is impacting margins, and leading to a modest moderation in the earnings outlook for F4Q and FY24 relative to prior expectations," said JP Morgan analyst Samik Chatterjee in a client note.
I caught up with HP CEO Enrique Lores last night. You can watch part of that chat below. Take note of what Lores said about the spread and impact of AI. I think a lot of cost-cutting is coming to Corporate America next year because of AI, and we are seeing signs of it already (check out the mass layoffs recently announced at TurboTax seller Intuit (INTU)).
Thu, August 29, 2024 at 5:04 PM GMT+7
Nvidia quick take
Nvidia (NVDA) shares are getting hit pre-market as the quarter didn't live up to super high Wall Street expectations.
But the earnings call sure did, I think. There was no indication from the call that demand is slowing, actually quite the contrary. Everything Nvidia talked about suggested a further acceleration in demand for its high-powered AI chips.
That said, I am seeing the Street tweak estimates this morning amid higher expenses related to the production ramp for Blackwell chips.
Good points here by Ruben Roy over at Stifel:
"Blackwell production ramp is scheduled to begin in F4Q, with expectations for several billion dollars in revenue in that quarter followed by volume increases to continue into F2026. In the near-term, higher operating expenses and modestly lower gross margin (new product mix) will moderate EPS growth. Bigger picture, the modernization of data center compute continues and, in our view, NVDA remains the primary beneficiary."
Thu, August 29, 2024 at 4:59 PM GMT+7
Salesforce aims to better monetize AI
Salesforce (CRM) shares are on the move higher following a comeback quarter after the close.
I caught up with Salesforce chairman and CEO Benioff, and came away very interested in the company's new "agents" that it will begin deploying within companies. These will basically be AI-powered robots that interact with humans to, say, close deals and upsell.
Interestingly, Salesforce will charge clients per conversation for the product — which could add up to real money.
Here is my full chat with Benioff following his earnings call last night.