HPE stock jumps more than 27% as AI server demand drives record quarter

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HPE stock jumps 27%

Highlights

HPE revenue rose 40% to $10.7 billion, while adjusted EPS more than doubled to $0.79.
AI server and networking demand drove the earnings beat and a record backlog.
Shares jumped sharply, more than 27%, over the last 2 sessions.
The company raised its full-year outlook and accelerated long-term financial targets.

AI demand lifts earnings

According to Yahoo!Finance, HPE reported fiscal second-quarter revenue of $10.7 billion, up 40% from a year earlier, while adjusted earnings per share rose 108% to $0.79. Both figures exceeded Wall Street expectations, helped by strong demand for AI infrastructure, traditional servers, and networking equipment.

The company’s Cloud and AI segment generated $7.71 billion in revenue, above analyst forecasts, while server revenue reached $5.45 billion. Networking revenue rose 148% to about $2.7 billion, helped by demand for data-center networking and the integration of Juniper Networks.

Chief Executive Antonio Neri said customers are continuing to modernize infrastructure and scale AI workloads. Management also pointed to strong demand for on-premises AI systems, where companies use CPU-based servers to run inference workloads locally and securely rather than relying only on cloud providers.

Shares jump on raised outlook

HPE shares closed Monday at $47.00, up 9.20%, and traded overnight at $59.99, up 27.64%, according to the market data shown. The stock has gained more than 90% this year, with momentum building after Dell’s strong AI server results last week.

HPE also raised its fiscal 2026 revenue growth forecast to 29% to 33%, up from a previous range of 17% to 22%. The company now expects adjusted earnings of $3.35 to $3.45 per share for the year and forecasts third-quarter revenue of $11.5 billion to $12.1 billion.

AI infrastructure broadens beyond chips

HPE’s results show that the AI trade is expanding from semiconductor makers into the broader infrastructure stack. Companies investing in AI need servers, networking, storage, and on-premises systems, not just GPUs. That shift is benefiting hardware suppliers that can serve enterprise and government customers with secure local infrastructure.

The scale of the beat also matters for market sentiment. Revenue topped $10 billion for the first time, and the company said traditional server bookings rose by triple digits from a year earlier, giving investors another signal that AI spending remains durable beyond the largest cloud providers.

In an earlier report, we noted that Anthropic's IPO filing escalates the race with OpenAI.

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