Hewlett Packard (HPE) Stock Pops After Revenue Guidance Tops Estimates

TLDR

• HPE Q1 revenue rose 18% to $9.30B, EPS of $0.65 beat estimates by $0.07
• AI backlog exceeded $5 billion, with enterprise and sovereign customers making up 64% of orders
• Q2 revenue guidance of $9.60B–$10.0B came in above the analyst consensus of $9.57B
• HPE raised its FY2026 adjusted EPS forecast to $2.30–$2.50, up from $2.25–$2.45
• The company is shifting focus to higher-margin networking orders, raising annual networking segment revenue growth guidance to 68%–73%

Hewlett Packard Enterprise posted a solid first quarter, beating EPS estimates and guiding Q2 revenue above Wall Street expectations. The stock edged up roughly 1.3% in after-hours trading on Monday.

Q1 revenue came in at $9.30 billion, up 18% year over year, just shy of the $9.33 billion consensus estimate. Adjusted EPS of $0.65 beat the $0.58 estimate by $0.07.

HPE also raised its full-year FY2026 adjusted EPS forecast to a range of $2.30–$2.50, compared to its prior guidance of $2.25–$2.45.

Hewlett Packard Enterprise Company, HPE

CEO Antonio Neri said orders grew double digits year over year across all business segments. That’s a strong demand signal, even as the company navigates real supply constraints.

The AI backlog crossed $5 billion in Q1. Enterprise and sovereign customers made up 64% of that cumulative order mix — a detail that points to where HPE sees its best business coming from.

That said, HPE acknowledged it doesn’t have enough supply to meet current demand, and it expects elevated prices to hold through 2027.

Shifting Strategy Toward Higher-Margin Orders

CFO Marie Myers was direct on the post-earnings call. HPE is prioritizing higher-margin product orders for the rest of the year, which could weigh on AI systems revenue growth.

The company has also shortened its quoting cycles and kept the ability to adjust pricing between order and shipment — a practical hedge against rising memory chip costs tied to AI infrastructure buildout.

This shift is intentional. In a market where Dell (DELL) and Super Micro Computer (SMCI) are chasing volume, HPE is choosing margin.

Q2 revenue guidance came in at $9.60B–$10.0B, above the analyst consensus of $9.57B. Q2 EPS guidance of $0.51–$0.55 straddles the $0.53 consensus.

Networking Segment Gets a Bigger Spotlight

HPE raised its annual networking segment revenue growth guidance to 68%–73%. The networking unit now includes Juniper Networks, which HPE acquired, covering products and services that connect servers, data centers, and devices to networks and software.

Big Tech’s projected $630 billion in AI infrastructure spending this year is a tailwind for that segment. HPE is positioning itself to capture a slice of that through its networking and server equipment.

On the stock price side, HPE closed at $21.81 before earnings. The stock is down about 9% year to date, while rival Dell is up 16.4% over the same stretch.

HPE saw 11 positive EPS revisions and just 1 negative revision in the last 90 days, according to InvestingPro, which rates the company’s financial health as “fair performance.”

The stock is down 11.12% over the past three months but up 44.63% over the last 12 months.

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