Though IT giants such as HP Enterprise (HPE) , IBM (IBM) and Cisco Systems (CSCO) continue seeing major hardware pressures, it's not affecting the data center sales of some of their biggest chip suppliers too badly.
Intel's (INTC) Data Center Group (DCG) reported 24% annual Q1 revenue growth on the back of strong cloud and telco demand. Micron's (MU) biggest DRAM reporting segment saw 93% revenue growth in the company's February quarter -- strong DRAM pricing helped, but so did a 28% sequential increase in cloud server revenue. And Nvidia's (NVDA) Datacenter segment saw revenue rise 71% during the company's April quarter, thanks to solid demand in both enterprise and cloud environments.
Soaring cloud capital spending is certainly helping out, but so are other factors. Micron, for example, is benefiting from rising solid-state drive (SSD) penetration rates and greater adoption of memory-intensive AI and analytics workloads. Nvidia is getting a lift from an AI investment boom cutting across both cloud and enterprise clients, as well as higher penetration rates for its GPUs in supercomputer projects.
These companies still face potential competitive and/or pricing headwinds. But overall, data center demand easily looks better for them than for some of their major traditional enterprise hardware clients.