Hewlett Packard Enterprise (HPE) Stock Jumps 30% After Earnings Beat

TLDR

• HPE reported Q2 adjusted EPS of $0.79 on revenue of $10.7B, beating estimates of $0.53 EPS and $9.78B revenue
• The company raised its fiscal 2026 revenue growth outlook to 29%–33%, up from 17%–22%
• Cloud & AI segment revenue hit $7.71B, topping Wall Street’s $6.93B estimate
• Networking revenue surged 148% to $2.69B following the Juniper Networks acquisition
• HPE plans to return approximately 75% of free cash flow to shareholders in fiscal 2027

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Hewlett Packard Enterprise (HPE) stock surged roughly 30% in after-hours trading Monday after the company delivered a strong fiscal second-quarter earnings beat and sharply raised its full-year outlook.

Hewlett Packard Enterprise Company, HPE

HPE reported adjusted earnings of $0.79 per share on revenue of $10.7 billion. Analysts had expected $0.53 per share on $9.78 billion in revenue.

In the same quarter a year ago, HPE posted $0.38 per share on $7.63 billion in revenue. The year-over-year jump tells the story of how fast the business has moved.

The stock had already climbed 96% year-to-date heading into the print, and is up 171% over the past 12 months.

Cloud & AI revenue — the segment that includes its server business — came in at $7.71 billion, above the $6.93 billion Wall Street had penciled in.

Outlook Gets a Big Upgrade

HPE raised its fiscal 2026 revenue growth forecast to a range of 29%–33%, up from the prior guidance of 17%–22%. Its networking segment growth outlook also moved higher, to 72%–75% from 68%–73%.

The company said its revised fiscal 2026 ranges for adjusted EPS and free cash flow are already higher than what it had originally projected to achieve by fiscal 2028 — effectively pulling forward its long-term targets by two years.

CFO Marie Myers told Reuters the key shift this quarter was enterprise customers adopting agentic AI as a core workload. That’s a pattern HPE expects to continue.

Juniper Acquisition Paying Off

HPE’s networking revenue hit $2.69 billion, up 148% year-over-year. That jump is largely thanks to the Juniper Networks acquisition, which closed in July 2025 after regulatory delays.

The number came in just ahead of analyst estimates of $2.68 billion, but the story is the scale of the gain versus the prior year period.

Neri added that HPE expects to return about 75% of free cash flow to shareholders in fiscal 2027.

HPE’s 12-month forward price-to-earnings ratio sits at 15.93 — well below Dell at 24.14 and Cisco at 25.56. That gap has caught the attention of some on Wall Street who see room to re-rate.

Dell also had a strong recent quarter, reporting better-than-expected results on May 28 and raising its own revenue outlook. Super Micro Computer rose around 5% in sympathy Tuesday, while Dell climbed roughly 3%.

Hyperscalers including Alphabet and Amazon are projected to spend more than $700 billion on AI infrastructure this year, a spending wave that continues to flow through to HPE’s order book.

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