Hewlett Packard Enterprise (HPE) reported second-quarter adjusted earnings per share (EPS) of 79 cents, beating analyst expectations of 53 cents, and revenue of $10.68 billion, well above the anticipated $9.79 billion [1, 2, 3]. The revenue growth marked a 40% increase compared to the same period last year [1, 3].
The company’s Cloud & AI unit posted revenue of $7.71 billion, surpassing estimates of $6.87 billion, with its server sub-division generating $5.45 billion, significantly exceeding the $4.66 billion expected [1, 2, 3]. This strong performance was driven primarily by traditional server sales and increased AI-related demand from enterprise customers. HPE CFO Marie Myers said the quarter's strength came as enterprises began seeing agentic AI as a core workload, boosting server purchases [3].
Following the earnings report on June 1, 2026, HPE shares surged dramatically, with various sources noting intraday gains ranging from 9.2% in regular trading to nearly 36% in after-hours sessions [1, 3]. Some reported a 30% jump, while others noted the price climbed 25% the following day, approaching all-time highs as analysts raised price targets [1, 2, 3]. Morgan Stanley analysts highlighted "material upside to results from inelastic server demand and share capture," but cautioned that "durability of demand vs. peak earnings risk will be the key debate from here" [2].
HPE raised its full-year fiscal 2026 adjusted EPS guidance to a range of $3.35 to $3.45, up from the prior $2.30 to $2.50, signaling performance two years ahead of its long-term plan [1, 3]. The company also lifted its revenue growth forecast to 29%-33%, from an earlier 17%-22% guidance [3]. The network unit’s revenue growth expectations were increased to 72%-75% annually [3].
HPE’s AI backlog orders exceeded $6.3 billion, with 61% coming from government and large enterprise customers, underscoring the impact of AI demand on the business [3].
The strong Q2 results and bullish outlook set the stage for HPE’s next quarterly earnings announcement, which investors will watch closely for signs on sustainability of AI server demand.
