HPE missed its revenue expectations according to its first quarter 2024 financial results, with the company’s year-over-year revenue dropping by 14 percent to $6.8 billion.

Although the company still posted profit of $387 million, that figure is almost $115m down on the same period of 2023.

Despite the global demand for compute power to support AI workloads, HPE’s server segment – which includes the company’s compute and HPC and AI segments – saw the biggest declines in sales, dropping by 23 percent year-over-year.

Speaking to analysts on the company's earnings call, Antonio Neri, CEO and President, said HPE “did not have the GPU supply we wanted, curtailing our revenue upside.”

He added that in addition to GPU availability remaining tight, the company’s delivery timing “has also been affected by the increasing length of time customers require to set up the data center space, power and cooling requirements needed to run these systems.”

On the same call, CFO Marie Myers added that HPE was taking “swift action to address these headwinds” and said that “GPU supply, while still constrained, is improving.”

Consequently, Neri told analysts that the company expects to see its server and hybrid cloud segments “grow sequentially through the fiscal year,” with server revenue standing to benefit from AI system demand and improving GPU supply.

HPE is also hoping to continue capitalizing on the demand for AI systems, with Neri stating that it saw its cumulative accelerator processing unit orders rise to $4 billion in the quarter. He said this growth was driven by demand across HPE Cray EX and XT solutions, as well as HPE ProLiant Gen11 AI-optimized servers.

During the quarter, HPE’s hybrid cloud segment saw revenue fall by 10 percent to $1.2bn, while its intelligent edge revenue grew by 3 percent, to also reach $1.2bn.

“Hybrid cloud will benefit from continued HPE GreenLake storage demand and the rising productivity of our specialized sales force,” Neri said.

Commenting on the company’s $14bn pending acquisition of Juniper Networks, Neri told analysts the deal will allow HPE to “supercharge HPE's edge-to-cloud strategy” by “accelerating our entire portfolio with AI-enabled innovation.”

He added that the transaction is expected to double the size of HPE’s networking business, providing a $180bn market opportunity.