Track market-moving stories before they get noisy

Hewlett Packard Enterprise, a hybrid-cloud infrastructure vendor HPE , unveiled plans to support Nvidia OpenShell and introduce Vera CPU rack infrastructure, while shares traded at $54.60, down 6.14% at 11.20am EST on Thursday. The push targets businesses that need tighter control over autonomous AI systems, sensitive data and computing resources. More AI hardware gets HPE through the door. Security and governance could help it capture more spending once inside.

The earnings test is already taking shape. HPE's fiscal-third-quarter results showed Cloud and AI revenue of $9.0 billion, up 25.4% from a year earlier, while the segment's operating margin reached 17%, versus 7%. That 10-percentage-point improvement matters: growth delivered a much stronger profit contribution. The question now is whether new AI deployments can sustain that profitability as customers demand more complex systems and support.

The valuation leaves little room for sloppy execution. The chart places the shares 90.98% above the $28.59 GF Value estimate, suggesting substantial growth expectations remain priced in despite the selloff. That estimate is a valuation reference, not a guaranteed destination. HPE's next hurdle is turning its broader AI offering into revenue and cash flow while defending the margin gains it has already delivered.

HPE just posted its worst week ever after a single analyst downgrade, yet its earnings are surging and its backlog hit a record high. The real question is whether the market sees a danger that the numbers are hiding.

Shares of Hewlett Packard Enterprise (NYSE:HPE | HPE Price Prediction) fell 20.56% in the week through October 19. It was its worst week ever, following an October 14 analyst downgrade that questioned HPE’s AI growth.

The drop hit a stock that already traded at a forward PE of roughly 12 to 15, while the broader market averages 30. Investors Dave Ahern and Stephen Morris recently debated whether that gap makes HPE an opportunity or a value trap.

Ahern asked: “Is that a lifetime opportunity, or does Wall Street know something that the rest of value investors maybe don’t know? Like, why is it so cheap?” The question is pressing because the results are strong.

Revenue in the fiscal third quarter rose 32.7% to $12.21 billion. Non-GAAP EPS of $1.11 beat the $0.93 consensus.

Morris rated HPE’s moat today as “next to non-existent,” and that view accounts for most of the discount.

A 12x Multiple Signals Doubt About Durability
A forward PE divides the share price by expected earnings. A low multiple therefore means investors doubt those estimates will hold, and the market is currently pricing in a fade in AI server demand.

The trailing P/E of 1300x is distorted by Juniper integration charges and a fiscal 2025 goodwill impairment. That is why the hosts focus on the forward number.

Analysts’ average fiscal 2027 EPS estimate is $4.7088, up from $4.0384 90 days ago. None of those analysts revised down in the past 30 days.

Management’s own fiscal 2027 framework calls for EPS of $4.40 to $4.60. That range leaves out the Helios AI rack opportunity.

Wall Street Turned Cautious After a Huge Run
Even after falling 8.05% over the past month, HPE is still up 135.22% year to date and 147.52% over the past year. Shares rose 1.29% on October 19 to $55.84. The post-downgrade rebound was small.

Although the market has embraced HPE this year, it remains unclear whether AI-driven earnings will last long enough to justify that price. Still, orders grew faster than revenue, and backlog hit a record while memory shortages held back shipments.

Servers Bring Growth Without Protection
Ahern’s long-term test sets the hype aside: “Forget the AI trade. What is a stock going to do 10 years from now?” AI server revenue fails that test because it is cyclical: orders shrink once data center buildouts slow, and nothing ties buyers to HPE.

Server revenue rose 35.3% to $6.77 billion on AI demand. Servers are a competitive, low-margin business, and customers switch suppliers over price, which is why the picks-and-shovels names behind the AI expansion (power, cooling, networking) often look more durable than the box makers; we rounded up seven of them in a free report here.

Management expects gross margin to return to historical levels as AI systems take up a larger share of sales. It guides Cloud and AI operating margin to about 13% in fiscal 2027.

Juniper Is HPE’s First Real Shot at a Moat
HPE closed its Juniper Networks acquisition and sold its remaining 19% stake in China-based H3C in May 2026. Together, those moves changed its business mix toward networking.

Networking gear is built into how a customer runs its operations, and it costs a lot to replace. The segment earned a 22% operating margin last quarter. With Juniper included, networking revenue jumped 74.9% to $2.89 billion, and orders rose 36%.

GreenLake lets customers pay for infrastructure as a service inside their own data centers, and it reached 52,000 customers, up 18%. Rising net retention would point to recurring revenue, while flat usage would suggest customers use it to finance hardware.

Discussing the chief executive’s vision, Morris said “the uncertainty around that statement is very high,” but added that if it “comes to fruition,” HPE “will be significantly untouchable.” Juniper likely moves HPE’s moat from absent to plausible, although the integration still has to prove it can hold customers.

What Could Close HPE’s Valuation Gap
HPE’s case looks strongest under Ahern’s 10-year test. The weekly drop and a forward multiple far below the market’s already price in heavy doubt.

Juniper savings are on track for a $600 million annual run rate by fiscal 2028. Meanwhile, a 1.07% dividend yield on a $74.1 billion company provides some income.

The thesis breaks if networking growth stalls after the integration, if GreenLake fails to become recurring revenue, or if AI server demand falls faster than networking can make up for it. Fiscal fourth-quarter results come next. Revenue is guided to $13.9 billion to $14.8 billion, and management has promised a fuller fiscal 2027 outlook.

Contact [email protected] for any questions or corrections.

AdvisorNet Financial Inc lifted its position in Hewlett Packard Enterprise Company (NYSE:HPE – Free Report) by 809.6% in the third quarter, according to the company in its most recent 13F filing with the Securities & Exchange Commission. The firm owned 43,563 shares of the technology company’s stock after purchasing an additional 38,774 shares during the quarter. AdvisorNet Financial Inc’s holdings in Hewlett Packard Enterprise were worth $2,749,000 at the end of the most recent quarter.

A number of other hedge funds also recently added to or reduced their stakes in HPE. Elliott Investment Management L.P. raised its holdings in Hewlett Packard Enterprise by 47.2% in the 1st quarter. Elliott Investment Management L.P. now owns 27,421,735 shares of the technology company’s stock valued at $652,912,000 after acquiring an additional 8,790,757 shares during the last quarter. Barrow Hanley Mewhinney & Strauss LLC acquired a new stake in Hewlett Packard Enterprise during the second quarter worth about $1,027,139,000. Primecap Management Co. CA bought a new position in Hewlett Packard Enterprise in the 2nd quarter worth about $773,225,000. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC raised its position in shares of Hewlett Packard Enterprise by 6.1% during the 2nd quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 13,088,774 shares of the technology company’s stock worth $590,435,000 after buying an additional 756,972 shares in the last quarter. Finally, Legal & General Group Plc bought a new stake in Hewlett Packard Enterprise during the second quarter worth approximately $512,721,000. 80.78% of the stock is owned by hedge funds and other institutional investors.

Insider Buying and Selling In related news, CEO Antonio F. Neri sold 250,000 shares of Hewlett Packard Enterprise stock in a transaction on Monday, October 5th. The shares were sold at an average price of $68.31, for a total value of $17,077,500.00. Following the transaction, the chief executive officer owned 1,182,393 shares in the company, valued at $80,769,265.83. This trade represents a 17.45% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Gary Reiner sold 17,000 shares of the stock in a transaction on Monday, September 14th. The shares were sold at an average price of $56.91, for a total transaction of $967,470.00. Following the sale, the director directly owned 65,072 shares of the company’s stock, valued at $3,703,247.52. The trade was a 20.71% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last 90 days, insiders sold 551,456 shares of company stock valued at $35,271,258. 0.44% of the stock is owned by insiders.

Hewlett Packard Enterprise News Summary Here are the key news stories impacting Hewlett Packard Enterprise this week: Positive Sentiment: HPE announced a planned $75 million expansion in Chippewa Falls, Wisconsin, expected to create 75 jobs. The investment supports the company’s manufacturing and infrastructure operations, although its near-term effect on earnings is likely limited. HPE to spend $75M to expand, add 75 jobs in Chippewa Falls Positive Sentiment: Some investors remain constructive because HPE has reported record revenue, orders and backlog, while demand for traditional servers, AI systems and networking—and higher server prices—has supported recent results. HPE stock was also reported to be up substantially for the year before the latest retreat. What Was HPE Telling You Before Its Stock Ran? Neutral Sentiment: ETF selling added to short-term pressure, while some dip buyers are betting that HPE can convert its AI and server orders into revenue. However, the recent decline has raised questions about whether earlier dip-buying strategies will continue to work. ETFs Are Net Sellers of Hewlett Packard Enterprise Negative Sentiment: Barclays downgraded HPE to Equal Weight from Overweight and lowered its price target to $77 from $83. The firm questioned how quickly corporate customers will adopt AI hardware and suggested that memory-component inflation, rather than new AI deployments, may be driving server revenue growth. Why Hewlett Packard Enterprise Stock Is Trading Lower Today Negative Sentiment: Concerns over how customers will finance large AI infrastructure projects have spread across hardware stocks, including HPE, Dell and Super Micro. The resulting sector-wide selling, combined with scrutiny of HPE’s server revenue quality and adoption timeline, drove a roughly 20% decline between October 9 and October 15. AI Financing Worries Extend Hardware Selloff Analyst Ratings Changes A number of research analysts recently commented on the stock. Deutsche Bank Aktiengesellschaft assumed coverage on shares of Hewlett Packard Enterprise in a research report on Tuesday, September 1st. They set a “buy” rating and a $62.00 price objective on the stock. Daiwa Securities Group upgraded shares of Hewlett Packard Enterprise from a “neutral” rating to an “outperform” rating and increased their target price for the company from $65.00 to $75.00 in a research note on Friday, October 2nd. The Goldman Sachs Group raised their price objective on shares of Hewlett Packard Enterprise from $75.00 to $80.00 and gave the stock a “buy” rating in a report on Tuesday, October 6th. Bank of America lifted their price target on shares of Hewlett Packard Enterprise from $80.00 to $82.00 and gave the company a “buy” rating in a report on Monday, August 31st. Finally, Raymond James Financial increased their price objective on shares of Hewlett Packard Enterprise from $74.00 to $86.00 and gave the stock an “outperform” rating in a report on Thursday, September 3rd. Two investment analysts have rated the stock with a Strong Buy rating, ten have assigned a Buy rating and eight have assigned a Hold rating to the company. Based on data from MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and a consensus target price of $65.44.

View Our Latest Research Report on HPE

Hewlett Packard Enterprise Trading Down 5.6% Shares of Hewlett Packard Enterprise stock opened at $55.32 on Friday. The firm’s 50 day moving average is $59.34 and its 200 day moving average is $46.33. Hewlett Packard Enterprise Company has a 1 year low of $19.84 and a 1 year high of $73.56. The firm has a market capitalization of $73.44 billion, a PE ratio of 28.81, a price-to-earnings-growth ratio of 0.52 and a beta of 1.39. The company has a current ratio of 1.11, a quick ratio of 0.72 and a debt-to-equity ratio of 0.65.

Hewlett Packard Enterprise (NYSE:HPE – Get Free Report) last released its earnings results on Wednesday, September 2nd. The technology company reported $1.11 earnings per share for the quarter, beating analysts’ consensus estimates of $0.93 by $0.18. Hewlett Packard Enterprise had a net margin of 6.60% and a return on equity of 15.50%. The business had revenue of $12.21 billion during the quarter, compared to the consensus estimate of $11.97 billion. During the same quarter in the prior year, the firm posted $0.44 EPS. The company’s revenue for the quarter was up 33.7% compared to the same quarter last year. Hewlett Packard Enterprise has set its Q4 2026 guidance at 1.200-1.300 EPS and its FY 2026 guidance at 3.750-3.850 EPS. Equities research analysts forecast that Hewlett Packard Enterprise Company will post 3.34 earnings per share for the current fiscal year.

Hewlett Packard Enterprise Dividend Announcement The company also recently announced a quarterly dividend, which was paid on Friday, October 16th. Shareholders of record on Thursday, September 17th were given a dividend of $0.1425 per share. The ex-dividend date of this dividend was Thursday, September 17th. This represents a $0.57 annualized dividend and a dividend yield of 1.0%. Hewlett Packard Enterprise’s dividend payout ratio (DPR) is currently 29.69%.

(Free Report)

Hewlett Packard Enterprise Company (NYSE:HPE) is a global technology company that provides information technology products, services and solutions for businesses, governments and other organizations. Its offerings are designed to help customers build, manage and secure data center, cloud and edge-computing environments.

HPE’s portfolio includes enterprise servers, high-performance computing systems, data storage, networking equipment, software and technology consulting services. The company also provides hybrid cloud and as-a-service solutions through HPE GreenLake, allowing customers to access and manage computing, storage, data protection and other IT capabilities through a flexible consumption model.

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Sax Wealth Advisors LLC raised its position in Hewlett Packard Enterprise Company (NYSE:HPE – Free Report) by 97.1% during the third quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The institutional investor owned 17,310 shares of the technology company’s stock after purchasing an additional 8,528 shares during the period. Sax Wealth Advisors LLC’s holdings in Hewlett Packard Enterprise were worth $1,106,000 at the end of the most recent reporting period.

Other institutional investors and hedge funds also recently added to or reduced their stakes in the company. Barrow Hanley Mewhinney & Strauss LLC purchased a new position in shares of Hewlett Packard Enterprise during the second quarter valued at approximately $1,027,139,000. Primecap Management Co. CA purchased a new stake in Hewlett Packard Enterprise in the 2nd quarter worth approximately $773,225,000. Legal & General Group Plc purchased a new stake in Hewlett Packard Enterprise in the 2nd quarter worth approximately $512,721,000. Elliott Investment Management L.P. grew its stake in Hewlett Packard Enterprise by 47.2% in the 1st quarter. Elliott Investment Management L.P. now owns 27,421,735 shares of the technology company’s stock worth $652,912,000 after acquiring an additional 8,790,757 shares during the period. Finally, Bank of New York Mellon Corp acquired a new position in Hewlett Packard Enterprise in the 2nd quarter valued at $322,718,000. 80.78% of the stock is currently owned by hedge funds and other institutional investors.

Hewlett Packard Enterprise Stock Performance Hewlett Packard Enterprise stock opened at $63.22 on Thursday. Hewlett Packard Enterprise Company has a 12-month low of $19.84 and a 12-month high of $73.56. The company has a debt-to-equity ratio of 0.65, a current ratio of 1.11 and a quick ratio of 0.72. The company has a market capitalization of $83.92 billion, a price-to-earnings ratio of 32.93, a price-to-earnings-growth ratio of 0.61 and a beta of 1.39. The firm’s fifty day moving average price is $59.18 and its 200 day moving average price is $46.02.

Hewlett Packard Enterprise (NYSE:HPE – Get Free Report) last posted its quarterly earnings data on Wednesday, September 2nd. The technology company reported $1.11 earnings per share for the quarter, beating analysts’ consensus estimates of $0.93 by $0.18. Hewlett Packard Enterprise had a net margin of 6.60% and a return on equity of 15.50%. The company had revenue of $12.21 billion during the quarter, compared to analysts’ expectations of $11.97 billion. During the same period in the prior year, the company posted $0.44 EPS. The firm’s revenue for the quarter was up 33.7% on a year-over-year basis. Hewlett Packard Enterprise has set its Q4 2026 guidance at 1.200-1.300 EPS and its FY 2026 guidance at 3.750-3.850 EPS. On average, research analysts forecast that Hewlett Packard Enterprise Company will post 3.34 EPS for the current fiscal year. Hewlett Packard Enterprise Dividend Announcement The firm also recently announced a quarterly dividend, which will be paid on Friday, October 16th. Stockholders of record on Thursday, September 17th will be paid a dividend of $0.1425 per share. This represents a $0.57 annualized dividend and a dividend yield of 0.9%. The ex-dividend date is Thursday, September 17th. Hewlett Packard Enterprise’s dividend payout ratio is 29.69%.

Insider Transactions at Hewlett Packard Enterprise In related news, EVP Rami Rahim sold 34,456 shares of the company’s stock in a transaction on Tuesday, September 29th. The shares were sold at an average price of $61.42, for a total value of $2,116,287.52. Following the sale, the executive vice president directly owned 875,133 shares of the company’s stock, valued at $53,750,668.86. This represents a 3.79% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Antonio F. Neri sold 250,000 shares of the stock in a transaction on Monday, October 5th. The shares were sold at an average price of $68.31, for a total transaction of $17,077,500.00. Following the transaction, the chief executive officer owned 1,182,393 shares in the company, valued at $80,769,265.83. This trade represents a 17.45% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last quarter, insiders sold 551,456 shares of company stock valued at $35,271,258. 0.44% of the stock is currently owned by corporate insiders.

Hewlett Packard Enterprise News Summary Here are the key news stories impacting Hewlett Packard Enterprise this week:

Positive Sentiment: Daiwa upgraded HPE to Outperform, providing a positive counterpoint to the recent wave of rating cuts and suggesting that the company’s growth prospects remain attractive. Daiwa upgrades Hewlett Packard Enterprise stock to Outperform Positive Sentiment: HPE’s operating momentum remains a supportive factor. The company has reported accelerating sales growth, raised its fiscal 2026 and 2027 outlooks, increased its long-term networking growth forecast, and announced a $1.2 billion AI order from cloud provider Vultr. The Juniper Networks acquisition is also viewed as strengthening HPE’s networking and AI infrastructure position. Hewlett Packard Enterprise: Fears Mount For Bears As Juniper Acquisition Shows Strength Neutral Sentiment: HPE has been among the market’s strongest technology performers, trading near its 52-week high. That momentum supports investor interest, but it also raises the risk of profit-taking and makes the stock more sensitive to valuation-related downgrades. 4 Stocks Trading Near 52-Week High With Room to Rise Further Negative Sentiment: Barclays downgraded HPE from Overweight to Equal Weight and reduced its price target from $83 to $77. Analyst Tim Long cited elevated valuation and a lack of a “meaningful AI inflection,” while adopting a more cautious view of enterprise IT spending. The downgrade also pressured Dell and NetApp, intensifying sector-wide concerns. Dell, HPE and NetApp Stocks Slump After Downgrades on Worries About AI Spending Negative Sentiment: Evercore previously cut HPE to In Line, arguing that the valuation had become stretched after the rally and that limited near-term catalysts could support further multiple expansion. HPE was reportedly trading well above its historical earnings multiple, increasing downside sensitivity if AI growth fails to accelerate. How Evercore’s Valuation-Driven Downgrade At Hewlett Packard Enterprise Has Changed Its Investment Story Analyst Upgrades and Downgrades HPE has been the topic of a number of recent analyst reports. Susquehanna reduced their price target on Hewlett Packard Enterprise from $65.00 to $62.00 and set a “neutral” rating on the stock in a research note on Friday, September 4th. Weiss Ratings raised Hewlett Packard Enterprise from a “buy (b-)” rating to a “buy (b)” rating in a research report on Friday, September 4th. Raymond James Financial upped their target price on Hewlett Packard Enterprise from $74.00 to $86.00 and gave the company an “outperform” rating in a research note on Thursday, September 3rd. Barclays downgraded Hewlett Packard Enterprise from an “overweight” rating to an “equal weight” rating and reduced their target price for the stock from $83.00 to $77.00 in a research report on Wednesday. Finally, Bank of America raised their price target on Hewlett Packard Enterprise from $80.00 to $82.00 and gave the stock a “buy” rating in a research note on Monday, August 31st. Two investment analysts have rated the stock with a Strong Buy rating, ten have issued a Buy rating and eight have given a Hold rating to the stock. According to data from MarketBeat.com, the company currently has an average rating of “Moderate Buy” and a consensus price target of $65.44.

View Our Latest Research Report on Hewlett Packard Enterprise

(Free Report)

Hewlett Packard Enterprise Company (NYSE:HPE) is a global technology company that provides information technology products, services and solutions for businesses, governments and other organizations. Its offerings are designed to help customers build, manage and secure data center, cloud and edge-computing environments.

HPE’s portfolio includes enterprise servers, high-performance computing systems, data storage, networking equipment, software and technology consulting services. The company also provides hybrid cloud and as-a-service solutions through HPE GreenLake, allowing customers to access and manage computing, storage, data protection and other IT capabilities through a flexible consumption model.

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Key Takeaways HPE & NVDA are expanding integrated AI infrastructure to simplify enterprise deployment & scale AI workloads.HPE's AI Factory and Private Cloud AI combine compute, storage, networking and cloud management capabilities.HPE shares have surged 205.9% YTD, while its forward price-to-sales ratio of 1.79 trails the industry's 4.60. Hewlett Packard Enterprise (HPE - Free Report) has partnered with NVIDIA (NVDA - Free Report) to help enterprises and other large AI customers simplify and scale generative AI, agentic AI and high-performance computing workloads. The integration enables Hewlett Packard Enterprise to provide integrated AI infrastructure, including hardware, software and cloud management.

At the core of the collaboration is HPE AI Factory with NVIDIA, a turnkey AI infrastructure solution that combines HPE's compute, storage, networking and GreenLake platform with NVIDIA's GPUs, CPUs, networking technologies and AI Enterprise software. The integrated offering allows enterprises to build and manage AI environments through a unified platform.

The companies have also jointly engineered HPE Private Cloud AI, which enables customers to deploy generative AI and agentic AI applications securely in on-premises or hybrid cloud environments. The solution comes with pre-integrated hardware and software, reducing deployment complexity while providing enterprise-grade capabilities.

HPE is further strengthening its AI hardware portfolio with AI-optimized servers such as the HPE ProLiant Compute DL394 Gen12, powered by NVIDIA's Vera CPU for reinforcement learning, AI agents, inference and large-scale data processing. The company also offers systems based on NVIDIA's Blackwell and Rubin architectures.

To accelerate AI workloads, HPE integrates NVIDIA's Blackwell, HGX and RTX Pro GPUs alongside Spectrum-X Ethernet, InfiniBand networking, BlueField DPUs and ConnectX SuperNICs across its AI infrastructure portfolio. HPE also incorporates NVIDIA Agent Toolkit, Nemotron models, NeMo and OpenShell into HPE Private Cloud AI, enabling enterprises to build, govern and monitor AI agents with enhanced security and observability.

How Competitors Fare Against HPEHPE competes with Super Micro Computer (SMCI - Free Report) and Dell Technologies (DELL - Free Report) in the AI infrastructure space. Both SMCI and DELL are collaborating with NVIDIA to strengthen their offerings. For instance, Super Micro Computer's competitive advantage lies in its modular Building Block architecture that enables rapid product customization by reusing components across thousands of server configurations.

Supported by more than 3,200 research and development engineers, SMCI quickly integrates new processors from NVIDIA, AMD, Intel and ARM. This rapid product development shortens time-to-market, lowers engineering costs and enables faster global shipments, making Super Micro Computer particularly attractive for customers seeking immediate AI deployment.

Dell Technologies, meanwhile, is pursuing a broader ecosystem strategy through its Dell AI Factory with NVIDIA. Rather than focusing solely on servers, DELL is expanding across compute, storage, networking, automation and software. Dell Technologies recently introduced PowerEdge R9822 and M9822 servers powered by NVIDIA Vera CPUs for Agentic AI workloads.

Although all three companies are leveraging NVIDIA's latest AI technologies, their competitive strategies differ. HPE is betting on integrated enterprise AI platforms that combine infrastructure with cloud software and managed services and has a visible edge in this arena.

HPE’s Price Performance, Valuation and EstimatesHewlett Packard Enterprise has skyrocketed 205.9% year to date, outperforming the Zacks Computer - Integrated Systems industry’s appreciation of 130.1% and the Zacks Computer and Technology sector’s return of 23.7%.

HPE YTD Performance Chart
Image Source: Zacks Investment Research

Despite the appreciation in the share price, HPE trades at a discount. From a valuation standpoint, HPE trades at a forward price-to-sales ratio of 1.79, below the industry’s 4.60.

HPE Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for HPE’s fiscal 2026 margin implies year-over-year growth of 96.4%. Estimates have been revised upward in the past 60 days.

Image Source: Zacks Investment Research

HPE currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

It has been about a month since the last earnings report for Hewlett Packard Enterprise (HPE - Free Report) . Shares have added about 18.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Hewlett Packard Enterprise due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important drivers.

HPE Q3 Earnings Surpass Expectations, Revenues Rise Y/YHewlett Packard Enterprise posted non-GAAP earnings of $1.11 per share for the third quarter of fiscal 2026, which increased 152.3% year over year and beat the Zacks Consensus Estimate of 95 cents by 16.8%.

Revenues of $12.21 billion rose 33.7% year over year and beat the consensus estimate by 1%. The quarter benefited from accelerating demand for traditional servers, AI systems and networking, while disciplined pricing and a richer networking mix supported profitability.

HPE’s normalized orders increased 42% year over year, and total AI backlog reached a record $7.6 billion exiting the quarter.

HPE's Networking Orders Outpace ShipmentsNetworking revenues were $2.89 billion, up 74.9% year over year on a reported basis and 10% on a normalized basis. The segment's operating margin was 22% compared with 22.1% in the year-ago quarter.

Normalized Networking orders increased 36%, materially faster than revenues as supply constraints limited conversions. Campus & Branch revenues were $1.44 billion, while Routing contributed $788 million. Networks for AI orders reached $700 million in the quarter, taking cumulative orders to $2.2 billion and prompting HPE to raise its fiscal 2026 target to $2.5-$3 billion.

The company also signed a gigawatt-scale deal with Oracle for routers and switches supporting a major AI cloud infrastructure buildout. Management said networking purchase commitments more than doubled sequentially to help improve supply availability and convert the elevated backlog.

Hewlett Packard Enterprise's Cloud & AI Demand AcceleratesCloud & AI revenues totaled $9.04 billion, up 25.4% year over year. The segment's operating margin expanded to 17% from 7%, supported by strong server demand, pricing and scale.

Server revenues rose 35.3% to $6.77 billion, while Storage revenues increased 10.2% to $1.29 billion. AI Systems orders were $2.4 billion, and backlog climbed to $6.8 billion. After quarter-end, HPE was awarded a $3.5 billion inferencing deal with a hyperscaler customer.

Private Cloud AI orders increased at a triple-digit rate year over year, while the HPE GreenLake customer count grew 18% to 52,000. Management said enterprises are moving from AI pilots toward production use cases, particularly agentic AI and inferencing workloads.

HPE Expands Margins on Pricing and MixNon-GAAP gross profit reached $4.93 billion, up from $2.73 billion a year ago. The non-GAAP gross margin widened to 40.4% from 29.9%, reflecting pricing discipline in traditional servers and a favorable mix.

Non-GAAP operating profit increased to $1.98 billion from $777 million, while the operating margin improved to 16.2% from 8.5%. Non-GAAP operating expenses rose 17.3% sequentially to $2.95 billion, mainly because of higher variable compensation.

Management expects gross margin to moderate as AI Systems become a larger portion of sales and traditional server margins normalize. Juniper integration synergies remain on track to reach a $600 million annualized run rate by the end of fiscal 2028, with the integration running ahead of plan.

Hewlett Packard Enterprise Strengthens Cash FlowOperating cash flow was $1.64 billion, while free cash flow totaled $958 million. HPE returned $324 million to common shareholders through dividends and share repurchases during the quarter.

Cash and cash equivalents ended the period at $6.22 billion. Total net debt fell to $14.03 billion, and the net debt-to-adjusted EBITDA ratio declined to 1.8 times, below the company's two-times target more than a year ahead of its original plan.

HPE Raises Fiscal 2026 and 2027 OutlookFor the fourth quarter of fiscal 2026, HPE expects revenues of $13.9-$14.8 billion and non-GAAP earnings of $1.20-$1.30 per share. Networking revenues are projected to grow 11-13%, while Cloud & AI revenues are expected to increase 60-72%.

For fiscal 2026, HPE raised its revenue growth outlook to 34-37% and non-GAAP earnings-per-share guidance to $3.75-$3.85. Free cash flow is now expected to be at least $3.75 billion.

For fiscal 2027, management raised its revenue growth framework to 13-17% and projected non-GAAP earnings-per-share growth of 16-20%. The company expects a 14-15% non-GAAP operating margin and free cash flow of at least $5 billion, with Networking revenue growth of 14-17% and Cloud & AI growth of 14-18%.

How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a upward trend in estimates revision.

The consensus estimate has shifted 23.86% due to these changes.

VGM ScoresAt this time, Hewlett Packard Enterprise has a average Growth Score of C, a score with the same score on the momentum front. Following the exact same course, the stock has a score of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Hewlett Packard Enterprise has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

HPE just shattered its 52-week high on a single session surge, yet its forward multiple still sits far below every major competitor building the same AI infrastructure boom. Something in the valuation math does not add up.

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Hewlett Packard Enterprise (NYSE:HPE | HPE Price Prediction) trades at $66.93 this morning. That is up 8.85% on the session as AI demand keeps raising its networking business. Our 24/7 Wall St. price target for HPE is $73.07 over the next 12 months. The model rates it a buy with high confidence.

Metric Value Current Price $66.93 Price Target from 24/7 Wall St. $73.07 Upside 9.2% Recommendation BUY Confidence Level 90% We ran the model off Tuesday’s close of $61.49, showing to 18.84% upside. Today’s jump cuts the remaining gap to 9.2%. Our confidence rests on five straight EPS beats, guidance raised through fiscal 2027, and zero Sell ratings on the Street.

Record Q3 Results Pushed HPE Past Its Prior 52-Week High HPE is up 9.67% over the past week, 28.25% over the past month and 181.79% year to date. Today’s price sits above its prior 52-week high of $65.65 and far above the $19.57 low.

Fiscal Q3 revenue hit $12.21B, up 32.7%, exceeding the $11.91B consensus. Non-GAAP EPS of $1.11 cleared the $0.93 estimate. Networking revenue rose 74.9% to $2.89B, and routing went up 270%. HPE announced a $3.5 billion inferencing server deal with a hyperscaler and expanded work with Oracle (NYSE:ORCL) on gigawatt-scale AI networking.

The AI expansion keeps pulling in suppliers well beyond the chipmakers, and networking gear like HPE’s is a big part of the plumbing (we covered seven of these non-chip AI infrastructure names in a free report available here: 7 Stocks Powering the AI Boom).

  Why Bulls See $83 and Beyond In the model’s bull case, HPE reaches $83.23. Management’s fiscal 2027 framework calls for EPS of $4.40 to $4.60 and free cash flow of at least $5 billion. That framework leaves out the AMD (NASDAQ:AMD) Helios opportunity, which the CEO sized at “tens of billions of dollars” across the market.

Networks for AI orders reached $700 million in the quarter. Juniper synergies are on track for $600 million in annual run-rate savings by FY28.

The Street is supportive, with 5 Strong Buy ratings, 10 Buys and 8 Holds. The stock already trades above the $68.08 consensus target, so analysts may raise their numbers.

Margin Normalization Is the Risk Worth Watching Under a downside scenario, HPE slips to $56.43. Management expects gross margin to normalize as AI systems grow. Operating margin guidance of 14-15% for FY27 trails Q3’s 16.2%. Stripping out Juniper, networking grew just 10%.

DDR5 and NAND shortages slow shipments. Orders outpace revenue: networking orders rose 36% with record backlog, suggesting supply delays revenue rather than kills demand.

HPE Trades at a Steep Discount to Dell and Arista Company Forward P/E Quarterly Revenue Growth (YoY) HPE 14x 33.7% Dell 21x 57.7% Arista 39x 37.7% Dell Technologies (NYSE:DELL) competes directly for AI server spending. Dell grows faster, earning a higher forward multiple. HPE’s larger networking mix yields higher margins that its 14x forward P/E does not reflect.

Arista Networks (NYSE:ANET) competes head-on in data center switching. Arista’s operating margin is 45.4% versus 12.6% for HPE, explaining most of its premium. HPE’s networking margin is guided to the mid to high 20% range, so part of that gap should close. Our target of about 15x forward earnings looks conservative.

HPE’s Backlog Tips the Scale Toward Upside Our $73.07 target carries a buy rating with 90% confidence. A record backlog priced at a valuation well below peers tips the scale toward upside.

The case strengthens if supply eases and backlog turns to revenue in Q4. It weakens if gross margins contract faster than networking growth can offset. HPE’s valuation still falls behind its fundamentals.

Year Price Target from 24/7 Wall St. 2026 $63.11 2027 $77.21 2028 $85.24 2029 $93.56 2030 $102.38 These projections assume HPE keeps executing on its networking-led strategy. A strong Helios ramp could drove results higher, while long-running memory shortages could hold them back.

Contact [email protected] for any questions or corrections.

Hewlett Packard Enterprise Company (HPE) Analyst/Investor Day September 30, 2026 11:30 AM EDT

Company Participants

Shannon Cross - Chief Strategy Officer
Rami Rahim - Executive VP, President & GM of Networking
Praveen Jain
AE Natarajan - Executive VP & Chief Development Officer
David Hughes - Founder & Chairman of the Board
Sujai Hajela - Executive Vice President of AI-Driven Enterprise

Conference Call Participants

Sajeev Nair
Joseph Cardoso - JPMorgan Chase & Co, Research Division
Erik Woodring - Morgan Stanley, Research Division
Asiya Merchant - Citigroup Inc., Research Division
Simon Leopold - Raymond James & Associates, Inc., Research Division
Wamsi Mohan - BofA Securities, Research Division
Louis Miscioscia - Daiwa Capital Markets America Inc., Research Division
Ananda Baruah - Loop Capital Markets LLC, Research Division
George Notter - Wolfe Research, LLC
David Vogt - UBS Investment Bank, Research Division
Victor Santiago - Evercore ISI Institutional Equities, Research Division

Presentation

Shannon Cross
Chief Strategy Officer

Good morning, everyone, and welcome to HPE Networking Investor Day. Thank you for joining us both here in person and on the webcast. I'm Shannon Cross, Chief Strategy Officer at HPE. As you all know, we posted record Q3 results earlier this month. In Networking, for example, we reported both record revenue and orders.

Today, we'll take a closer look at the business and the strategy we have in place to capture new opportunities we see for the future. Over the next few hours, you'll hear from Rami Rahim, Executive Vice President, President and General Manager of HPE Networking about how AI is reshaping the networking market and why networking is considered critical infrastructure in the AI era. We will also talk about how the combination of HPE and Juniper Networks strengthens our ability to compete and win in this increasingly important market. We'll discuss our integration progress and the financial benefits we are already seeing. We'll then invite the leaders of our networking business to join me for

Key Takeaways HPE's networking revenues jumped 74.9%, while normalized orders rose 36%, outpacing the revenue growth.HPE secured a gigawatt-scale Oracle deal as networking purchase commitments more than doubled sequentially.Acquisition expands HPE's networking reach as AI inferencing and agentic workloads drive demand. Hewlett Packard Enterprise’s (HPE - Free Report) networking revenues were $2.89 billion, which increased 74.9% year over year on a reported basis and 10% on a normalized basis. The segment's operating margin was 22% compared with 22.1% in the year-ago quarter. The company’s normalized Networking orders increased 36%, materially faster than its year-over-year revenue growth.

HPE’s third-quarter fiscal 2026 revenues of $12.21 billion rose 33.7% year over year, driven largely by its Campus & Branch revenues of $1.44 billion, with Routing contributing $788 million. Networks for AI orders reached $700 million in the quarter, taking cumulative orders to $2.2 billion.

The company also signed a gigawatt-scale deal with Oracle for routers and switches supporting a major AI cloud infrastructure buildout. Management said that networking purchase commitments more than doubled sequentially to help improve supply availability and convert the elevated backlog.

HPE’s Juniper acquisition is broadening the company’s reach across campus and branch, data center switching, routing and security. Integration remains ahead of schedule, prompting HPE to raise its fiscal 2026 target to $2.5-$3 billion. Networking growth was supported by Hewlett Packard Enterprise’s model of packaging compute, storage, networking and cloud management into AI systems and Private Cloud AI solutions.

As AI inference and agentic workloads are on the rise, the demand for HPE’s networking solutions will remain high. However, competition in this space remains intense as the company competes on technology, innovation, price, quality and reliability against larger vendors.

How Competitors Fare Against HPEHewlett Packard Enterprise competes with Cisco (CSCO - Free Report) and Arista Networks (ANET - Free Report) in the AI networking space. Arista Networks’ leadership in software-driven switching, growing AI fabric adoption, broader campus and routing reach, and continued product innovation support a durable growth outlook for the company.

Cisco closed fiscal 2026 with $9.3 billion in hyperscaler AI infrastructure orders, about 4.5 times fiscal 2025, and roughly $4 billion in related revenues. Management expects hyperscaler AI revenues to reach $7.5 billion in fiscal 2027. In the fourth quarter of fiscal 2026, networking product orders rose 40% year over year, the eighth straight quarter of double-digit growth.

Cisco’s campus and branch networking has grown about 20% for several quarters. CSCO identified more than $100 billion in Cisco end-of-life and end-of-support upgrade opportunities over the next few years. On the other hand, Arista Networks is positioned to benefit from sustained investment in AI, cloud and enterprise networking as customers expand high-speed Ethernet infrastructure.

HPE’s Price Performance, Valuation and EstimatesShares of Hewlett Packard Enterprise have rallied 159.4% year to date, outperforming the Zacks Computer - Integrated Systems industry’s growth of 133.6%.

HPE YTD Performance Chart
Image Source: Zacks Investment Research

Despite the appreciation in the share price, HPE trades at a discount. From a valuation standpoint, HPE trades at a forward price-to-sales ratio of 1.52, below the industry’s 5.22.

HPE Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for HPE’s fiscal 2026 earnings suggests year-over-year growth of 96.4%. Estimates have been revised upward in the past 30 days.

Image Source: Zacks Investment Research

HPE currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

How 4 Million Hewlett Packard Shares Bought an AI NetworkHewlett Packard Enterprise NYSE: HPE Chief Strategy Officer Shannon Cross said the company is seeing strong demand across networking, storage and traditional servers, while supply availability and order conversion remain key priorities as it targets growth in fiscal 2027.

Speaking at the Goldman Sachs Communacopia + Technology Conference, Cross highlighted HPE's most recent quarterly performance, including $1.11 in earnings per share, nearly $1 billion in free cash flow and what she described as the company's first quarter with more than $1 in earnings per share. She said the company also raised its free-cash-flow target to at least $3.75 billion for fiscal 2026 and at least $5 billion for the following year.

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Why Hewlett Packard Enterprise’s Sell-Off May Not LastGoldman Sachs analyst Kat Murphy noted that HPE had raised its fiscal 2026 and fiscal 2027 outlook, with fiscal 2027 guidance calling for 13% to 17% revenue growth and 16% to 20% EPS growth. Cross said the company is focused on translating its expanding order backlog into revenue.

Networking Demand Drives Outlook Cross said networking revenue increased 10% in the latest quarter, while orders rose 36%. Storage revenue also grew 10%, with order growth running at roughly twice that rate, she said. Traditional server orders increased 75% year over year.

The Trade Desk’s Earnings Miss Raises a Bigger Question About Its AI FutureHPE's confidence in its outlook partly reflects larger multiyear supply agreements for components in tight supply, Cross said. She noted that disclosed purchase commitments rose from $6 billion to $30 billion, with networking commitments doubling sequentially and the remaining increase tied to cloud and AI-related components.

“Demand is absolutely not a problem,” Cross said. “It’s basically being able to deliver the customers.”

HPE has raised its fiscal 2026 target for Networks for AI orders to between $2.5 billion and $3 billion, compared with an earlier target of $1.5 billion. Cross pointed to demand across routing and switching products, including the PTX router, MX router and QFX platform.

She said the company sees particular opportunity in routing infrastructure used to connect AI data centers. Cross also cited HPE's direct liquid-cooled QFX switch, which she said is a 100% direct liquid-cooled Tomahawk 6 top-of-rack switch and reached the market at least six months ahead of competing products.

Oracle Deal and Juniper Integration Cross discussed HPE's previously announced Oracle AI data-center opportunity, describing it as a competitive win involving PTX, MX and QFX products. She said Oracle was attracted by the liquid-cooled switch, HPE's broader scale and its financial-services and leasing capabilities.

The deal serves as a proof point that HPE can compete in AI data-center networking, Cross said, adding that the company is speaking with other market participants about similar opportunities.

HPE expects its combination with Juniper Networks to expand the addressable market for networking products in enterprise and hyperscale accounts. Cross said HPE combined its sales force in January and plans to hold a “Partner Day One” on Nov. 1, when partners will be able to sell both product portfolios.

In campus and branch networking, Cross said HPE recorded low-teens order growth and 8% revenue growth, supported by a Wi-Fi 7 refresh cycle and customer interest in Juniper's Mist technology. She said the company plans to converge the Aruba and Mist offerings over time while seeking to maintain satisfaction among both customer bases.

For fiscal 2027, HPE has raised its networking growth outlook to 14% to 17%, from 8% to 12% previously. Cross said the outlook includes some Oracle contribution and modest acceleration in the core business. She attributed expected segment margin expansion into the mid-to-high 20% range primarily to synergies, while saying HPE will continue investing in silicon development, new products and the AMD Helios platform.

AI Servers and Private AI Infrastructure Cross said HPE intends to participate in AMD Helios through two approaches: supplying full HPE-branded racks containing server and scale-up networking technology, and supplying white-label trays to other server vendors working with AMD. She said the offering could help HPE pursue hyperscale and neocloud opportunities with a stronger margin profile because it incorporates HPE networking intellectual property.

HPE has maintained a selective approach to AI server deals, Cross said, avoiding what she called “empty-calorie revenue” when margins are insufficient. The company reported $2.4 billion in AI server orders during the quarter and nearly $7 billion in backlog, according to the discussion.

Cross also highlighted a $3.5 billion enterprise deal announced after quarter-end, which she described as a hyperscaler purchasing predominantly CPU-based, traditional servers for internal inference use. She said the deal carries traditional server margins and is expected to move through the business relatively quickly.

HPE sees a growing opportunity for customers to deploy private AI infrastructure to control token costs and keep sensitive data within their own environments. Cross said organizations in sectors including retail, technology, banking and pharmaceuticals are considering such deployments. HPE uses its own Private Cloud AI hardware internally for some workloads, she said.

Cross added that sovereign AI demand remains healthy, particularly in Europe, where governments are interested in maintaining cloud infrastructure within national borders for defense, government services and domestic technology development.

HPE will hold a Networking Investor Day in the Bay Area on Sept. 30, where Cross said management plans to provide additional detail on the combined networking business and its strategy.

About Hewlett Packard Enterprise (NYSE:HPE)Hewlett Packard Enterprise Company NYSE: HPE is a global technology company that provides information technology products, services and solutions for businesses and other organizations. Its offerings are designed to support data centers, cloud computing, artificial intelligence, networking and the management of distributed IT environments.

HPE's portfolio includes enterprise servers, data storage systems, networking equipment, high-performance computing and software. Through its HPE GreenLake platform, the company also delivers cloud and as-a-service solutions that allow customers to access computing, storage, data protection and other IT capabilities through a flexible consumption model.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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Key Takeaways HPE's AI Systems orders hit $2.4 billion, while total AI backlog reached a record $7.6 billion.HPE's Cloud & AI revenues rose 25% as server revenues jumped 35% on AI-ready system demand.HPE's 40.4% gross margin and 155% operating profit growth signal stronger profitability. Hewlett Packard Enterprise (HPE - Free Report) shares have gained 25.9% in the past three months, outperforming the Zacks Computer - Integrated Systems industry’s appreciation of 2.2%. The Zacks Computer and Technology sector has witnessed no change in the same time frame.

HPE 3-Month Performance Chart
Image Source: Zacks Investment Research

Despite the appreciation in the share price, HPE trades at a discount. From a valuation standpoint, HPE trades at a forward price-to-sales ratio of 1.5, below the industry’s 4.81.

HPE Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research

Given these factors, the question arises: Should investors accumulate HPE stock or book profits and exit the investment?

HPE Grows on the Back of AI and Cloud DemandHewlett Packard Enterprise is benefiting from a broadening shift toward AI infrastructure, networking modernization and hybrid cloud. HPE is aligning its compute, storage and networking portfolios with enterprise inferencing, agentic AI and data-intensive workloads. HPE’s strategy spans AI systems, traditional servers, storage, Private Cloud AI and GreenLake, allowing it to participate across multiple stages of enterprise AI deployments.

In the third quarter of fiscal 2026, Cloud & AI revenues increased 25% year over year to $9 billion, with operating margin expanding to 17%. Server revenues rose 35%, while traditional server orders jumped 75%, driven by demand for AI-ready configurations and higher-value systems. Management said enterprises are moving from AI pilots toward production deployments, particularly for agentic AI and inferencing workloads, while HPE’s pipeline remains multiples of its backlog.

AI systems demand is also strengthening. HPE booked $2.4 billion of AI Systems orders in the fiscal third quarter, while AI Systems backlog increased 14% sequentially to $6.8 billion. Total AI backlog, including Networks for AI, reached a record $7.6 billion exiting the quarter. After quarter-end, HPE was awarded a $3.5 billion inferencing deal from a hyperscaler, providing further evidence that AI deployments are moving beyond experimentation toward production-scale workloads.

HPE’s Private Cloud AI offering is gaining traction as enterprises seek to run AI workloads closer to their data while maintaining control over governance, security and operations. Private Cloud AI orders grew at a triple-digit rate year over year. Meanwhile, GreenLake customers increased 18% year over year to 52,000, as customers expanded their consumption of software and intelligent cloud services. This strengthens HPE’s exposure to recurring, consumption-based revenues and increases software and services attachment across its infrastructure portfolio.

The Juniper Networks acquisition is further strengthening HPE’s AI infrastructure proposition by expanding its networking capabilities. The combination of strong AI demand, networking growth and pricing discipline is also improving profitability. HPE reported a record 40.4% non-GAAP gross margin in the fiscal third quarter, up from 29.9% a year earlier, while non-GAAP operating profit increased 155% to $2 billion.

HPE has consequently raised its fiscal 2026 earnings growth outlook. For fiscal 2027, management expects non-GAAP earnings-per-share of $3.75-$3.85. The Zacks Consensus Estimate for fiscal 2026 earnings suggests year-over-year growth of 98.4%. Estimates have been revised upward in the past seven days.

Image Source: Zacks Investment Research

HPE Expands Its Multi-Vendor Compute EcosystemHewlett Packard Enterprise is strengthening its position in the enterprise compute market through partnerships with multiple leading semiconductor companies, including Advanced Micro Devices (AMD - Free Report) and Intel (INTC - Free Report) . HPE offers a broad portfolio of ProLiant Compute servers powered by AMD EPYC processors, spanning virtualization, edge computing, data-intensive workloads and AI applications. Its latest Gen12 systems include AMD EPYC 9005 processors with up to 192 cores, enabling customers to achieve higher compute density and efficiency.

At the same time, HPE maintains a deep relationship with Intel. HPE expanded its locally manufactured portfolio with the launch of ProLiant Compute DL360 and DL380 Gen12 servers powered by Intel Xeon 6 processors. Manufactured at HPE’s Riyadh facility, the systems are designed to support Saudi Arabia’s digital sovereignty and Vision 2030 objectives while addressing demanding workloads across AI, analytics, virtualization and hybrid cloud.

HPE and NVIDIA (NVDA - Free Report) are expanding their collaboration to simplify enterprise AI deployment through integrated hardware, software and cloud management. HPE AI Factory with NVIDIA combines HPE compute, storage, networking and GreenLake with NVIDIA GPUs, CPUs, networking and AI Enterprise software. The companies also jointly developed HPE Private Cloud AI for secure on-premises and hybrid AI workloads.

HPE further supports NVIDIA Blackwell and Rubin architectures, Spectrum-X, InfiniBand, DPUs and AI-agent software across its AI infrastructure portfolio. Relationships with Intel, NVIDIA and Advanced Micro Devices demonstrate HPE’s strategy of supporting multiple processor ecosystems and a strong AI roadmap.

Conclusion: Buy HPE Stock NowHPE’s strong exposure to the rapidly expanding AI infrastructure market, growing traction in traditional servers and a strengthening networking portfolio make a compelling case for investors to accumulate the stock. Deep partnerships with NVIDIA, Intel and Advanced Micro Devices further support the case. Given these factors, we suggest that investors should accumulate this Zacks Rank #1 (Strong Buy) stock. You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Takeaways HPE, AVGO, and DELL all posted strong results recently. AI-related demand has benefited each in a big way. The AI trade remains alive and well, with Hewlett Packard Enterprise (HPE - Free Report) , Broadcom (AVGO - Free Report) , and Dell Technologies (DELL - Free Report) all recently posting strong quarterly results.

AI infrastructure spending was the clear theme across all releases, with demand remaining robust for servers, networking, and custom accelerators. Still, market reactions have been mixed, indicating that expectations remain sky-high for many AI-focused names.

Let’s take a closer look at the results.

HPE Raises Its OutlookHewlett Packard Enterprise posted record quarterly revenue of $12.2 billion, reflecting 34% YoY growth. Adjusted earnings came in at $1.11 per share, climbing sharply from $0.44 in the same period last year and exceeding the Zacks Consensus EPS estimate by nearly 17%.

Cloud & AI revenue reached $9.0 billion, up 25% YoY, with Server revenue climbing 35% to $6.8 billion. Networking results were even stronger, with revenue jumping 75% to $2.9 billion. Data Center Networking revenue more than doubled, while Routing revenue climbed 270%.

Importantly, the demand picture remains bright. AI Systems orders reached $2.4 billion during the quarter, with backlog climbing to $6.8 billion. HPE also raised its FY26 revenue growth outlook to 34%-37% and now expects adjusted EPS of $3.75-$3.85. Looking further ahead, management boosted its FY27 revenue growth outlook to 13%-17%, paired with expected adjusted EPS growth of 16%-20%.

The numbers were undoubtedly positive, though supply constraints and the lower-margin nature of some AI systems remain items to keep in mind. Still, the raised outlook and favorable Zacks Rank #2 (Buy) reflect a constructive earnings picture overall.

Image Source: Zacks Investment Research

Broadcom’s AI Growth AcceleratesBroadcom delivered another monster quarter, posting $29.6 billion in revenue, up 86% YoY. Adjusted EPS of $3.32 grew 96% from the year-ago period and came in 3% above the Zacks Consensus estimate.

To little surprise, AI again stole the show. AI semiconductor revenue reached $16.7 billion, surging 221% YoY and 54% sequentially as demand for custom accelerators and networking products remained red-hot. Semiconductor Solutions revenue overall climbed 127% to $20.8 billion, while Infrastructure Software revenue rose 29% to $8.8 billion.

And the momentum isn’t expected to slow down anytime soon. Broadcom expects AI semiconductor revenue of $21.7 billion next quarter, reflecting 236% YoY growth, with total revenue forecasted at roughly $34.8 billion. Management has also outlined roughly $115 billion of AI semiconductor revenue for FY27, with the longer-term opportunity potentially reaching $230 billion in FY28.

Interestingly enough, shares traded lower following the release despite the eye-popping growth. Expectations for Broadcom have clearly become massive, making even great results a tough act to follow. AVGO currently carries a Zacks Rank #3 (Hold), with the earnings-revision picture worth watching following the release.

Image Source: Zacks Investment Research

Dell’s AI Backlog SurgesDell Technologies arguably posted the most impressive results of the group, with shares surging following the release.

Revenue climbed 58% YoY to a record $47.0 billion, while adjusted EPS of $7.04 reflected growth of more than 200% and crushed the Zacks Consensus estimate. Infrastructure Solutions Group revenue jumped 89% to $31.8 billion, with segment operating income soaring 225% to $4.8 billion.

AI-Optimized Server revenue doubled to $16.4 billion, but the order and backlog figures were perhaps even more impressive. Dell booked a record $60.9 billion of AI server orders during the quarter and exited with a massive $95 billion backlog, providing strong top line visibility.

The strength wasn’t isolated to AI, either. Traditional Servers and Networking revenue jumped 122%, Storage revenue grew 26%, and Client Solutions Group sales climbed 20%. Dell raised its FY27 revenue outlook by $25 billion to $192 billion while boosting its AI-Optimized Server revenue expectation to $74 billion from $60 billion previously.

DELL currently sports a Zacks Rank #2 (Buy), with the combination of accelerating AI demand, a huge backlog, and raised guidance providing a rock-solid near-term backdrop.

Image Source: Zacks Investment Research

Bottom Line

The latest results from Hewlett Packard Enterprise (HPE - Free Report) , Broadcom (AVGO - Free Report) , and Dell Technologies (DELL - Free Report) further strengthened the AI infrastructure growth story.

Demand remains robust across several areas of the buildout, ranging from Dell and HPE’s AI servers and networking offerings to Broadcom’s custom accelerators and networking chips. And importantly, all three provided upbeat forward-looking commentary alongside their strong quarterly growth.

Hewlett Packard Enterprise (HPE.N) raised its annual forecasts on Wednesday after reporting quarterly results that beat Wall Street expectations, ​as surging AI-related demand across networking and servers drove growth across its ‌business.

Shares of the company, however, fell 8% in extended trading.

HPE's high-powered servers, which are essential for building and training AI models, have been in high demand from cloud computing giants and large ​enterprises.

Enterprise IT infrastructure spending is strengthening, driven by continued investment in AI, ​server refresh cycles and rising demand for data center capacity, Citi ⁠analysts have said.

"It's clear to us that the market, the tailwinds in AI, ​particularly the adoption of AI in the enterprise, is really starting to settle in," ​CFO Marie Myers told Reuters in an interview.

HPE expects enterprise adoption of AI to support growth beyond the current fiscal year, Myers said, after customers spent fiscal 2025 and 2026 testing AI ​systems and beginning deployments that are showing productivity gains.

HPE on Wednesday also announced an ​expansion to its collaboration with Oracle (ORCL.N) to help scale the software giant's global AI infrastructure, deploying ‌HPE ⁠Juniper Networking equipment across Oracle's AI data centers.

Myers noted that supply remained constrained, with memory being the main bottleneck, followed by NAND, CPUs and drives, though HPE has signed longer-term supply agreements to improve access to components.

"Demand is far outstripping supply."

HPE forecast ​fiscal 2026 revenue ​growth of 34% ⁠to 37%, up from 29% to 33% previously, and raised its adjusted earnings forecast to between $3.75 and $3.85 per share, from $3.35 and $3.45.

For ​fiscal 2027, HPE now projects revenue growth of 13% to 17%, ​up from ⁠8% to 12%, with adjusted EPS growth of 16% to 20%, versus 12% to 16% forecast previously.

Third-quarter revenue grew 33.6% to $12.21 billion, beating estimates of $11.91 billion. HPE earned $1.11 ⁠per share ​on an adjusted basis, ahead of estimates of ​93 cents.

HPE's results follow strong forecasts from rivals Dell (DELL.N) and Super Micro (SMCI.O) as Big Tech's AI spending is set to ​exceed $730 billion this year.

SummaryHewlett Packard Enterprise earns a buy rating, driven by surging AI infrastructure demand and a strengthened networking business post-Juniper acquisition.HPE posted record Q2 FY2026 revenue of $10.7 billion (+40% YoY), with Cloud and AI revenue up 22.9% and Networking revenue up 148.2%.Profitability is improving: Q2 non-GAAP EPS grew 108% YoY, Cloud and AI operating margin nearly doubled, and free cash flow guidance was raised to at least $3.5 billion.Valuation remains compelling, with HPE trading at 16.27x forward P/E, declining to 12.58x by FY3, offering strong growth at a discount to peers.pingingz/iStock via Getty Images

Thesis Hewlett Packard Enterprise (HPE) investment history is changing together with rapidly growing artificial intelligence infrastructure demand and the strengthened company's Networking business. HPE operations cover servers, data storage, network infrastructure, hybrid cloud, and funding solutions, but AI infrastructure and the

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Hewlett Packard Enterprise HPE stock rose more than 4% on Monday after Morgan Stanley upgraded the company, citing continued strength in enterprise AI infrastructure spending and arguing that demand for servers and networking hardware remains resilient despite concerns about the sustainability of the AI investment cycle.

Morgan Stanley analyst Erik Woodring upgraded HPE shares to Overweight from Equal-Weight and raised his price target to $71 from $69.

The move came after HPE shares surged 130% this year and 169% over the past 12 months.

Despite the strong rally, Woodring noted that HPE continues to trade at 14.3 times expected earnings over the next 12 months, below the S&P 500's multiple of 20 times.

Morgan Stanley identified HPE as its preferred original equipment manufacturer for investors seeking exposure to the enterprise infrastructure cycle.

“HPE is our preferred OEM [original equipment manufacturer] to play the enterprise infrastructure cycle, offering an attractive risk/reward,” Woodring wrote in a research note.

HPE develops servers and networking equipment that support artificial intelligence workloads.

As demand for AI computing continues to expand, the company has benefited from increased demand for its hardware, while higher memory prices have also contributed to stronger pricing for its products.

Although investors have questioned whether the AI hardware spending boom can continue, Morgan Stanley believes current industry trends remain supportive.

“Admittedly, we have been on the wrong side of the enterprise hardware trade, previously believing that record component inflation would quickly stymie a recovery in hardware spending,” Woodring wrote.

He added that AI demand continues to offset concerns about rising component costs.

“Together, these dynamics are supporting stronger revenue growth, greater pricing power and further earnings upside across enterprise hardware,” he said.

According to Morgan Stanley, enterprise customers continue to invest in computing and storage infrastructure as AI adoption accelerates.

Rather than delaying purchases, higher memory prices are encouraging customers to move ahead with infrastructure investments, supporting revenue growth for hardware suppliers such as HPE.

The firm believes these trends are strengthening pricing power across the enterprise hardware industry while creating additional earnings upside for companies exposed to AI infrastructure.

HPE stock traded around $55.50, extending a rally that has seen shares more than double since February.

HPE's rally this year has been notable enough that many retail investors have been tracking the stock closely through investment apps, alongside other AI infrastructure plays.

Morningstar also maintained a positive long-term view on HPE, assigning the company a fair value estimate of $64 per share.

The research firm expects AI-optimized servers and growing demand for general-purpose servers driven by agentic AI applications to remain key growth drivers.

It also believes HPE's acquisition of Juniper could strengthen its networking business.

Morningstar forecasts HPE's AI-optimized server business will generate roughly $10 billion in revenue by 2028.

It also expects general-purpose server revenue to grow at a 16% compound annual growth rate over the next three years and projects networking revenue to expand at a 30% CAGR through 2028, with normalized margins reaching 27%.

The firm said additional upside could emerge if HPE's AI-driven growth accelerates further.

Morningstar believes its fair value estimate could rise to $70 if investors assign a higher valuation to the company's growth prospects, and $80 or more if AI-driven expansion continues at an accelerated pace.

Posted by Defense World Staff on Jul 28th, 2026

Elliott Investment Management L.P. raised its holdings in shares of Hewlett Packard Enterprise Company (NYSE:HPE – Free Report) by 47.2% in the first quarter, according to the company in its most recent Form 13F filing with the Securities & Exchange Commission. The fund owned 27,421,735 shares of the technology company’s stock after buying an additional 8,790,757 shares during the quarter. Hewlett Packard Enterprise comprises 3.2% of Elliott Investment Management L.P.’s investment portfolio, making the stock its 5th largest holding. Elliott Investment Management L.P. owned approximately 2.07% of Hewlett Packard Enterprise worth $652,912,000 as of its most recent SEC filing.

Several other hedge funds also recently modified their holdings of the business. Headlands Technologies LLC bought a new position in Hewlett Packard Enterprise during the second quarter worth $26,000. SJS Investment Consulting Inc. boosted its holdings in Hewlett Packard Enterprise by 159.5% in the 1st quarter. SJS Investment Consulting Inc. now owns 1,165 shares of the technology company’s stock valued at $28,000 after purchasing an additional 716 shares during the period. Union Savings Bank acquired a new stake in Hewlett Packard Enterprise in the 4th quarter worth $30,000. Reflection Asset Management bought a new position in shares of Hewlett Packard Enterprise during the 4th quarter worth about $31,000. Finally, Thompson Investment Management Inc. bought a new position in shares of Hewlett Packard Enterprise during the 4th quarter worth about $34,000. 80.78% of the stock is owned by institutional investors.

Hewlett Packard Enterprise Price Performance Shares of Hewlett Packard Enterprise stock opened at $48.19 on Tuesday. The company has a debt-to-equity ratio of 0.72, a quick ratio of 0.75 and a current ratio of 1.09. The firm’s 50-day simple moving average is $45.43 and its 200-day simple moving average is $31.61. Hewlett Packard Enterprise Company has a twelve month low of $19.64 and a twelve month high of $64.25. The firm has a market cap of $63.81 billion, a P/E ratio of 45.04, a price-to-earnings-growth ratio of 0.52 and a beta of 1.42.

Hewlett Packard Enterprise (NYSE:HPE – Get Free Report) last posted its quarterly earnings results on Monday, June 1st. The technology company reported $0.79 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.54 by $0.25. The firm had revenue of $10.68 billion during the quarter, compared to analyst estimates of $9.78 billion. Hewlett Packard Enterprise had a net margin of 3.94% and a return on equity of 11.91%. The company’s quarterly revenue was up 40.0% compared to the same quarter last year. During the same quarter in the prior year, the business posted ($0.82) earnings per share. Hewlett Packard Enterprise has set its FY 2026 guidance at 3.350-3.450 EPS and its Q3 2026 guidance at 0.880-0.930 EPS. As a group, research analysts expect that Hewlett Packard Enterprise Company will post 2.88 EPS for the current fiscal year.

Hewlett Packard Enterprise Dividend Announcement The business also recently declared a quarterly dividend, which was paid on Wednesday, July 15th. Investors of record on Tuesday, June 16th were paid a $0.1425 dividend. The ex-dividend date of this dividend was Tuesday, June 16th. This represents a $0.57 annualized dividend and a yield of 1.2%. Hewlett Packard Enterprise’s payout ratio is currently 53.27%.

Analyst Ratings Changes Several research firms recently weighed in on HPE. Barclays increased their target price on shares of Hewlett Packard Enterprise from $28.00 to $67.00 and gave the company an “overweight” rating in a research note on Tuesday, June 2nd. Zacks Research upgraded Hewlett Packard Enterprise from a “hold” rating to a “strong-buy” rating in a research note on Wednesday, June 10th. Loop Capital raised Hewlett Packard Enterprise from a “hold” rating to a “buy” rating and upped their price target for the company from $23.00 to $75.00 in a report on Tuesday, June 2nd. Citigroup raised their price objective on Hewlett Packard Enterprise from $70.00 to $74.00 and gave the stock a “buy” rating in a research report on Friday. Finally, JPMorgan Chase & Co. boosted their price objective on Hewlett Packard Enterprise from $37.00 to $68.00 and gave the company an “overweight” rating in a research report on Tuesday, June 2nd. One investment analyst has rated the stock with a Strong Buy rating, eleven have given a Buy rating and six have assigned a Hold rating to the stock. Based on data from MarketBeat, the stock has an average rating of “Moderate Buy” and a consensus target price of $67.31.

Read Our Latest Stock Report on HPE

Insider Activity at Hewlett Packard Enterprise In other news, CFO Marie Myers sold 93,583 shares of the business’s stock in a transaction on Tuesday, May 5th. The shares were sold at an average price of $30.01, for a total value of $2,808,425.83. Following the sale, the chief financial officer owned 204,754 shares in the company, valued at approximately $6,144,667.54. The trade was a 31.37% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Bethany Mayer sold 6,482 shares of the company’s stock in a transaction dated Tuesday, May 5th. The stock was sold at an average price of $29.10, for a total transaction of $188,626.20. Following the completion of the sale, the director directly owned 8,018 shares in the company, valued at approximately $233,323.80. The trade was a 44.70% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 118,850 shares of company stock valued at $3,908,125 in the last 90 days. 0.44% of the stock is owned by corporate insiders.

Hewlett Packard Enterprise Company Profile (Free Report)

Hewlett Packard Enterprise (HPE) is an enterprise technology company that designs, develops and sells IT infrastructure, software and services for business and government customers. Its core offerings span servers, storage, networking, and related software, together with consulting, integration and support services aimed at modernizing and managing enterprise IT environments. HPE’s product portfolio includes systems for traditional data centers as well as solutions for high-performance computing, edge computing and telecommunications infrastructure.

A major focus for HPE is hybrid cloud and consumption-based IT.

Further Reading Five stocks we like better than Hewlett Packard Enterprise AirJoule’s Kubota Deal Is a Major Validation—But the Hard Part Comes Next Dividend Stocks May Be the Quiet Rotation Trade Investors Are Missing Now Refiner Stocks Are Near Record Highs—Can Iran-Driven Margins Keep Them There? Verizon May Be an AI Infrastructure Stock Hiding in Plain Sight Want to see what other hedge funds are holding HPE? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Hewlett Packard Enterprise Company (NYSE:HPE – Free Report).

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Key Takeaways HPE is benefiting from AI infrastructure demand and triple-digit server order growth.HPE entered Q3 with a $5.9 billion AI Systems backlog led by enterprise and sovereign customers.HPE is strengthening AI infrastructure with Juniper and record campus networking demand. Hewlett Packard Enterprise (HPE - Free Report) is benefiting from the modernization of traditional IT infrastructure and huge capex investment in artificial intelligence. HPE’s foray beyond traditional server architecture to accommodate compute, networking, storage, security, private cloud, virtualization, software for AI data centers and AI fabs is enabling it to monetize at a rapid pace.

Simultaneously, the demand for traditional servers, led by the end of the server technology cycle, has emerged as a major growth driver, with orders increasing by triple digits year over year. Enterprises are replacing aging infrastructure while also investing in servers for AI inferencing. These two tailwinds caused a multiplier effect, driving the second quarter of fiscal 2026 revenues to reach $10.7 billion.

Looking ahead, as AI moves into production, millions of enterprises will need infrastructure to run inference close to their proprietary data and applications. HPE is also benefiting directly from AI systems demand, entering the third quarter with $5.9 billion in AI Systems backlog, primarily from enterprise and sovereign customers. Juniper acquisition has also strengthened HPE in campus networking, data-center switching, routing and security.

HPE is uniquely positioned as it is one of the few companies that provide networking solutions as part of a wider AI infrastructure support. HPE’s self-driving networking capabilities, powered by agentic AI, further differentiate the portfolio.

Furthermore, HPE’s Campus and Branch orders reached record levels, Wi-Fi 7 sales increased more than sevenfold, data-center switching orders rose nearly 20%, and routing orders increased nearly 30% on a normalized basis in the second quarter of fiscal 2026. HPE is also benefiting from disruption in virtualization, with VM Essentials customer count increasing 43% during the first half of fiscal 2026.

How Competitors Fare Against HPE StockHPE competes with Super Micro Computer (SMCI - Free Report) and Dell Technologies (DELL - Free Report) in the AI infrastructure market. However, HPE’s ability to package compute, storage, networking and services into pre-configured solutions can reduce deployment complexity for enterprises and sovereign customers while giving it an edge over its competitors.

Super Micro Computer is on track to scale rack production capacity to more than 6,000 AI racks per month by the end of fiscal 2026, including 3,000 direct liquid cooling racks monthly.  SMCI is already shipping 150kW AI racks in volume and preparing 250kW and 500kW rack solutions to support future high-density AI training and inference workloads. Dell Technologies is a major supplier of servers and storage systems, with a broad customer base across enterprises and cloud providers. Its scale, established distribution and service offerings give it an edge in winning large contracts.

HPE’s Price Performance, Valuation and EstimatesHPE has gained 106.4% in the year-to-date period. However, the company has underperformed the Zacks Computer - Integrated Systems industry, which has returned 115.4% in the same time frame.

HPE YTD Performance Chart
Image Source: Zacks Investment Research

From a valuation standpoint, HPE trades at a forward price-to-sales ratio of 1.35, below the industry’s 6.08. The discounted valuation is also reflected by the Zacks Value Score of A.

HPE Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for HPE’s fiscal 2026 margin indicates year-over-year growth rate of 75.8%. Estimates have remained unchanged for the past 30 days.

Image Source: Zacks Investment Research

HPE currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

It has been about a month since the last earnings report for Hewlett Packard Enterprise (HPE - Free Report) . Shares have lost about 19.7% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Hewlett Packard Enterprise due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Hewlett Packard Enterprise Company before we dive into how investors and analysts have reacted as of late.

HPE Q2 Earnings Surpass Expectations, Revenues Rise Y/YHewlett Packard Enterprise reported better-than-expected results for second-quarter fiscal 2026.  HPE’s non-GAAP earnings of 79 cents per share beat the Zacks Consensus Estimate by 46.3% and increased 107.9% year over year.

HPE posted revenues of $10.7 billion for the quarter, beating the Zacks Consensus Estimate by 8.7%. The company’s revenues increased 40.0% year over year.

HPE’s quarterly performance was supported by strong demand across the portfolio, with orders more than doubling year over year and driving a record backlog. Management also highlighted progress in Juniper integration and the Catalyst initiative, which remained ahead of schedule.

HPE’s Segment-Wise PerformanceHewlett Packard’s Networking segment generated $2.7 billion in revenues in the second quarter of fiscal 2026, up 148.2% year over year. The segment’s operating profit margin was 21.6%, down from 25.0% in the year-ago quarter.

Within Networking, Campus & Branch revenues were $1.3 billion, up 50.2% year over year. Data Center Networking revenues were $320 million, up 233.3%, and Security revenues were $273 million, up 155.1%. Routing revenues were $775 million compared with $1 million in the year-ago quarter.

The Cloud & AI segment reported $7.7 billion in revenues, up 22.9% year over year, with an operating profit margin of 12.4%, up from 6.6% in the prior-year period.

Within Cloud & AI, Server revenues were $5.5 billion, up 32.7% year over year. Storage revenues totaled $1.2 billion, up 2.4%, while Financial Services contributed $0.9 billion, up 5.6% year over year.

HPE’s Corporate Investments and Other revenues came in at $281 million, up 3.3% from the prior-year period.

HPE’s Operating ResultsHewlett Packard’s non-GAAP gross profit for the second quarter of fiscal 2026 was $3.94 billion compared with $2.24 billion in the year-ago quarter, while the non-GAAP gross margin expanded to 36.9%, up 750 basis points year over year.

The company’s non-GAAP operating profit was $1.4 billion compared with $613 million in the year-ago quarter. The non-GAAP operating margin improved to 13.3%, up 530 basis points from the year-ago quarter.

HPE’s Balance Sheet and Cash FlowHewlett Packard ended the second quarter with $5.29 billion in cash and cash equivalents compared with $4.84 billion at the end of the previous quarter.

In the second quarter, HPE generated $1.4 billion in cash from operating activities and produced $915 million in free cash flow. The company returned $343 million through dividends and share repurchases during the quarter.

HPE Updates FY26 GuidanceHewlett Packard raised its outlook following the strong quarter and improved second-half visibility. For the third quarter of fiscal 2026, HPE expects revenues in the range of $11.5-$12.1 billion.

It anticipates non-GAAP earnings per share of 88-93 cents.

For fiscal 2026, HPE raised its revenue growth outlook to 29-33% and expects non-GAAP earnings per share of $3.35-$3.45.

The company also lifted its free cash flow outlook and now expects free cash flow to be at least $3.5 billion. Separately, HPE introduced a fiscal 2027 framework calling for revenue growth of 8-12% and free cash flow of at least $4.5 billion.

How Have Estimates Been Moving Since Then?It turns out, fresh estimates have trended upward during the past month.

The consensus estimate has shifted 71.61% due to these changes.

VGM ScoresAt this time, Hewlett Packard Enterprise has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock has a grade of B on the value side, putting it in the second quintile for value investors.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Hewlett Packard Enterprise has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.