Hewlett Packard Enterprise shares jumped 30% on Monday after the company reported stronger-than-expected second-quarter results and raised its full-year outlook. HPE said adjusted earnings came in at 79 cents per share, well above the 53 cents expected by analysts, while revenue reached $10.68 billion versus estimates of $9.79 billion. The company’s results marked its biggest earnings beat since February 2018.
Revenue rose 40% from a year earlier, led by the Cloud & AI segment, which generated $7.71 billion and topped expectations. The server business delivered the strongest performance, with revenue of $5.45 billion compared with the $4.66 billion forecast. HPE said demand for traditional servers has surged, with CEO Antonio Neri describing bookings as up triple digits and backlog at the highest level the company has ever seen.
Following the results, HPE increased its fiscal 2026 adjusted EPS guidance by $1, to a range of $3.35 to $3.45, up from a prior forecast of $2.30 to $2.50. Neri said the company is now running about two years ahead of its long-term financial plan, reflecting stronger demand and better execution across its portfolio.
The company’s profitability also improved sharply. Net income was $624 million, or 44 cents per share, compared with a net loss of $1.05 billion, or 82 cents per share, in the same quarter a year ago.
Management said customers continue to invest in modernizing infrastructure and deploying artificial intelligence, with especially strong momentum in on-premises AI for security-focused industries. HPE has been targeting national labs and large enterprises with those offerings, which analysts say can carry higher margins than neocloud-focused business models.
The rally in HPE shares also came after the company unveiled a new server rack at the Computex conference in Taiwan. The new system will use Nvidia’s Vera central processing units, which are now in full production. Nvidia CEO Jensen Huang said the chips represent a major new growth driver and will be available in the fall.
HPE said the new 12th-generation ProLiant server is optimized for agentic AI workloads and designed to support demanding use cases such as real-time reasoning in financial services. The New York Stock Exchange is among the early customers planning to use the system to help process more than a trillion messages per day.
Neri said the product reflects HPE’s push to deliver infrastructure for the most demanding AI environments, while Huang said the combination of Vera and HPE’s platform shows what purpose-built AI systems can do at scale.
Despite the strong outlook, HPE cautioned that a global memory shortage remains a risk, with elevated costs expected to continue into 2027.
