HPE has direct visibility into memory supply chains in a way that most companies don't. When they say the shortage runs longer than expected, that's not speculation. It's procurement reality. HPE's server segment actually declined 2.7% year over year despite the company being at the center of enterprise AI infrastructure, with memory constraints identified as the reason.
Datacenter capital expenditure is forecast to grow 17 percent annually through 2030, reaching $1.6 trillion, with supply chain constraints pushing up the price of components. The latest Cloud and Datacenter Market Snapshot [PDF] from analyst Omdia states that investment into AI infrastructure continues apace, despite all the talk of it being a bubble ready to burst. However, adoption of AI remains relatively low, it claims, with many more users and higher usage per user expected.
On a number of measures, equity market valuations appear stretched, particularly for technology companies focused on Artificial Intelligence, it said. This, when combined with increasing concentration within market indices, leaves equity markets particularly exposed should expectations around the impact of AI become less optimistic.
