Supply constraints continue to hold back Dell and HPE’s growth, even as their revenues boomed by a respective 58% and 34% in their latest quarters.
On their earnings calls, Dell COO Jeff Clarke stressed “demand was even greater than the results we published”, while HPE CEO Antonio Nero revealed its orders grew 3.5 times faster than revenue.
This was despite the duo logging bumper quarterly results that topped market expectations.
Dell smashed expectations as its total Q2 revenues leapt 58% year on year to $47bn.
Traditional server revenues were up 122%.
“We are doing everything we can to get more supply”
On the call, Clarke played down suggestions Dell’s numbers were underpinned by “pricing and pre-buys rather than real demand”.
“[Servers] cost more than they did last quarter and the quarter before and the quarter before. So there’s a notion of inflation inside our growth. But the underlying demand for the technology is significant,” he said.
Dell still has 1.2 million assets that are 14G or older in the install base which “have to be upgraded”, Clarke stressed.
“Regardless of the inflationary environment that exists, more data is being created on the planet at the edge and datacentre in the cloud, and that data has to be stored, it has to be encrypted and protected,” he said.
Asked about how much demand is being deferred due to price increases, Clarke divided customers into two camps – SMEs and public sector customers with fixed budgets that have had to rein in the number of units they are purchasing, and enterprises.
“You have larger customers globally that are investing in infrastructure. …We are seeing customers investing more than they plan to in infrastructure, modernising ahead, investing in AI ahead of their plans,” he said.
“We are doing everything we can to get more supply,” Clarke added.
Orders growing 3.5 times faster than revenue
On HPE’s earnings call, Neri acknowledged that supply constraints “continue to affect our ability to fulfil the increased customer demand”.
This is despite the Nasdaq-listed vendor seeing revenue jump 34% to $12.2bn in its Q3.
Server revenue growth hit 35% during the quarter, as “strong” ASP growth in traditional servers offset supply-constrained unit volumes.
The nature of the supply constraints remain unchanged, Neri indicated.
“So obviously on the commodity side, DDR5 is a great example of it. DDR4 for the older generation, NAND in the flash drive space. Those have been consistent themes now for three quarters, since the beginning of 2026,” he said.
HPE last month claimed it is beginning to get a tighter grip on supply constraints as it confirmed it had removed repricing terms for partners on orders of up to $1m.
“We said in our prepared remarks, our orders are growing 3.5 times faster than the revenue. What has limited us is the availability of supply,” Neri said on the call.
“We expect that supply will become more aligned to our order bookings as we go forward.”
