HPE: Record AI Quarter Paves Way to Hit 2028 Targets This Year

• HPE raised fiscal 2026 revenue growth outlook to 29-33% (from 17-22%) and adjusted EPS to $3.35-$3.45 (from $2.30-$2.50), surpassing original 2028 targets of at least $3.00 EPS
• Networking segment revenue growth forecast increased to 72-75%, up from 68-73%, as tech giants plan over $700 billion in AI infrastructure spending this year
• CFO cited enterprise customers' significant adoption of agentic AI as a core workload driving the traditional server business performance; company introduced fiscal 2027 framework projecting 8-12% revenue growth

HPE Reports Record AI-Driven Quarter, Accelerates Financial Targets by Two Years

Hewlett Packard Enterprise (HPE) posted exceptional second-quarter results on June 1, 2026, with revenue surging 40% to $10.68 billion, surpassing analyst estimates of $9.79 billion. The strong performance, driven by robust AI data center demand, prompted HPE to accelerate its long-term financial goals originally set for fiscal 2028 to fiscal 2026.

Key Financial Updates:

• Fiscal 2026 revenue growth outlook raised to 29-33%, up from previous 17-22% forecast
• Networking segment revenue growth increased to 72-75%, from 68-73%
• Adjusted EPS guidance raised to $3.35-$3.45 (vs. earlier $2.30-$2.50), exceeding the prior 2028 target of $3.00
• Fiscal 2027 framework projects 8-12% revenue growth, 12-16% adjusted EPS growth, and at least $4.5 billion in free cash flow

Market Drivers:

HPE's CFO Marie Myers attributed the quarter's strength to traditional server business focused on enterprise customers, highlighting a significant shift as enterprises adopt agentic AI as a core workload. The company competes with Dell and Super Micro Computer in supplying AI infrastructure to tech giants like Alphabet and Amazon, which collectively plan to spend over $700 billion on AI infrastructure in 2026.

Strategic Context:

CEO Antonio Neri emphasized continued customer investment in infrastructure modernization and AI scaling. The results reflect HPE's strong positioning amid a memory chip crunch and accelerating enterprise AI adoption, particularly for applications like ChatGPT. The company benefits from ongoing data center expansion driven by the AI boom.