HPE Stock Jumps 30% on AI Server Demand
Hewlett Packard Enterprise made it clear on June 1, 2026: the AI server boom is not slowing down for anyone paying attention to demand signals. HPE posted Q2 fiscal 2026 revenue of $10.68 billion, smashing the analyst consensus of $9.77 billion. The stock jumped 30% in after-hours trading, its biggest single-day earnings reaction since 2018.
The Numbers Behind HPE’s AI Surge
CEO Antonio Neri told CNBC that traditional server bookings are up triple digits, and it is the biggest backlog the company has ever seen. “Customers continue to invest in modernising their infrastructure and scaling AI, and our performance shows the strength of our combined networking portfolio,” Neri said in a release announcing the quarterly results.
Net income came in at $624 million, compared to a net loss of $1.05 billion a year ago. The company saw 148% growth in networking revenue for the latest quarter. Before the earnings report, HPE had an AI Systems backlog of more than $5 billion, with 64% coming from enterprise and sovereign buyers.
HPE Raises AI Server Forecast
The server maker bumped its full-year EPS guidance by a full dollar, projecting fiscal year 2026 EPS of $3.35 to $3.45, up from $2.30 to $2.50. The company said it is now tracking two years ahead of its own long-term financial plan. Revenue will increase about 31% in the fiscal year ending October 2026, and about 10% in the year ending October 2027.
Both are significantly higher than analyst growth expectations of 19% and 5.3% for fiscal years 2026 and 2027, respectively. HPE sees strong growth continuing over the next 18 months on the back of sustained server demand.
Supply Warning Amid New Server Launch
HPE also used the day to announce new hardware. HPE announced the ProLiant Compute DL394 Gen12 server with Nvidia’s Vera CPU before the bell. The machine targets agentic AI, reinforcement learning, and workloads with big data demands.
HPE said it plans to make the server available in fall 2026. The supply picture, however, is not comfortable. HPE has said it’s short on supply for current demand and sees high prices lasting into 2027. CEO Antonio Neri said the company is delivering “a new class of infrastructure.”
DRAM and NAND costs are elevated, with memory now over half the bill of materials of a server. Operating margin pressure is a real risk heading into Q3. HPE has earned its moment. However, the company is already warning investors that running ahead of supply for too long is its own kind of problem.
