Hewlett Packard Enterprise (NYSE: HPE) posted record second-quarter results on Monday, prompting the company to pull its long-term financial goals forward by two years.
The strong performance was driven by surging demand for servers and networking products as AI data center expansion accelerates across the industry.
Shares of the company rose 30% in extended trading following the results, a significant market reaction reflecting investor confidence in HPE’s revised outlook.
HPE also appointed Elliott Investment Management partner Christopher Hsu to its board in connection with a cooperation agreement with the investment firm.
HPE, which competes with Dell and Super Micro Computer, is benefiting as customers increasingly buy server and data center equipment to power AI applications amid a memory chip crunch.
U.S. tech giants including Alphabet and Amazon plan to spend over $700 billion on AI infrastructure this year, bolstering demand for suppliers such as HPE.
HPE raised its fiscal 2026 revenue growth outlook to between 29% and 33%, up from prior expectations of 17% to 22%, while annual networking segment revenue growth guidance was lifted to between 72% and 75%.
The company reported record revenue growth of 40% to $10.68 billion, beating analysts’ average estimate of $9.79 billion, while adjusted earnings per share of 79 cents topped expectations of 53 cents.
“The strength of the quarter was largely driven by the performance of our traditional server business, which is really focused on enterprise customers,” CFO Marie Myers told Reuters.
Myers said the key difference this quarter was the anticipated shift where enterprises significantly adopted agentic AI as a core workload.
HPE said its revised fiscal 2026 ranges for adjusted EPS and free cash flow are higher than what it had projected the company would achieve by fiscal 2028.
The company raised its annual adjusted EPS range to $3.35 to $3.45, compared with an earlier projection of $2.30 to $2.50, having previously anticipated adjusted EPS of at least $3.00 for fiscal 2028.
“Customers continue to invest in modernizing their infrastructure and scaling AI,” CEO Antonio Neri said.
HPE also introduced a fiscal 2027 growth framework, expecting revenue growth of 8% to 12%, adjusted EPS growth of 12% to 16%, and free cash flow of at least $4.5 billion.
