HP Just Reinforced Our Decision to Buy More Shares of This Holding

Now that we’ve digested Thursday's economic data and we wait for Friday's August Employment Report, let’s turn to some company comments made on Wednesday night and Thursday morning and what they mean for the Portfolio’s holdings, especially Marvell MRVL.

HP Enterprise

On Wednesday night, HP Enterprise HPE delivered solid quarter results, with notable strength in AI, networking and cloud. Management went on to point out that it exited the quarter with a record AI backlog of $3.7 billion after nearly doubling its AI orders on a quarter-over-quarter basis. The interesting call outs on that were sovereign business as up 250% and Server revenue hit an all-time high of $4.9% billion, up 21% sequentially.

HPE reaffirmed the rebound in networking demand in both the enterprise and wireline/wireless, which lines up more commonly with carrier infrastructure. Networking orders rose double-digits year over year, which implies further support for the rebound we’ve been calling for.

Ciena

Shares of Ciena CIEN are climbing on Thursday following the company’s top and bottom line beat, with management attributing it to “ongoing accelerated customer demand as the network becomes fundamental to the underpinning, growth, and monetization of AI."

Amazon

A report from SemiAnalysis finds Amazon Web Services is currently building three data center campuses for Anthropic, which will total 1.3 gigawatts of capacity. The same data centers are expected to primarily utilize Amazon's AMZN Trainium chips, for which Marvell is a partner, and are expected to come on stream later this year. That timing meshes with the expected re-acceleration in Marvell’s AI and data center chip business. In many ways, that timing lines up close to the December quarter ramp in capital spending at CoreWeave CRWV, which helps support Nvidia’s NVDA 2H 2025 outlook.

It also supports a favorable outlook for AWS entering 2026, a key driver of Amazon’s profits and cash flow. Much the way Costco COST membership business mode differentiates it from other brick-and-mortar retailers, AWS does the same for Amazon, allowing it to invest further in its digital shopping and grocery businesses, including shrinking delivery times. In our view, that will help Amazon win additional consumer wallet share in the quarters ahead in the U.S. and other markets.

Connecting the Dots

The comments on AI servers, networking and cloud demand support our recent decision to add further to the Portfolio’s position in Marvell.

The data center comments support the demand outlook for not only construction activity (keeping us bullish on United Rentals URI), but also electricity demand (which reaffirms our stance on Eaton ETN shares). To that end, the July Construction Spending report released on Tuesday showed the power category, which is benefiting from data center construction, maintained its momentum from 1H 2025. That keeps us bullish on ETN shares and is leading us to lift our URI price target to $1,000 from $950.

More Pro Portfolio

At the time of publication, TheStreet Pro Portfolio was long MRVL, AMZN, NVDA, COST, URI and ETN.