Hewlett Packard Enterprise saw strong intelligent edge and high-performance computing and AI revenue growth  in the fourth quarter, but its legacy compute and storage businesses struggled.

In the fourth quarter, HPE reported earnings of 49 cents a share on revenue of $7.4 billion, down 7% from a year ago. Non-GAAP earnings for the fourth quarter were 52 cents a share. Wall Street was expecting fourth quarter earnings of 50 cents a share on revenue of $7.55 billion.

For fiscal 2023, HPE delivered earnings of $1.54 a share on revenue of $29.1 billion, up 2% from a year ago. Non-GAAP earnings of $2.15 a share for fiscal 2023 were at the high range of guidance given at HPE's annual analyst meeting in October.

HPE CEO Antonio Neri said: "As we continue to capitalize on growing market opportunities – particularly as customer interest in AI continues to explode – I am confident in our ability to deliver substantial returns to our shareholders."

"CFO Jeremy Cox said HPE was seeing "promising indicators of continued demand in the areas of the market we are prioritizing, especially in AI."

On a conference call, Neri said:

"Even against an uncertain macroeconomic backdrop, we saw continued though uneven, demand across our HPE portfolio with a significant acceleration in AI orders. Demand in our AI solutions is exploding. We saw a significant uptick in customer demand in recent quarters for accelerated computing infrastructure and services. In Q4, orders for servers that include accelerated processing units or APUs represented 32% of our total server order mix, up more than 250% from the beginning of fiscal year 2023. APUs, which includes GPU-based servers orders across our business, represented 25% of our total server order mix in fiscal year 2023."

As for the outlook, HPE said first quarter revenue will be between $6.9 billion and $7.3 billion and reiterated fiscal 2024 sales growth between 2% to 4% in constant currency. First quarter non-GAAP earnings will be in the range of 42 cents a share to 50 cents a share.

Fiscal 2024 non-GAAP earnings will be between $1.82 a share to $2.02 a share.

HPE also reiterated annual recurring revenue growth of 35% to 45% from fiscal 2022 to fiscal 2026.