Key takeaways
- HPE shares rose 12.64% to $43.04 on Friday, capping a stunning nearly 80% year-to-date gain ahead of its second-quarter 2026 earnings release on Tuesday.
- Analysts expect Q2 earnings per share to reach $0.54 versus $0.38 in the year-ago period, with management guiding revenue between $9.6 billion and $10.0 billion.
- Q4 saw network revenues skyrocket by 152% (helped by the Juniper Networks acquisition), now contributing more than 50% of total operating profits
- The company began the second quarter with a record backlog of $5.0 billion in AI systems; Supply chain bottlenecks pose major implementation challenges
- While the consensus rating is a Moderate Buy, the average analyst price target of $33 suggests a potential downside of ~23% from current levels.
Hewlett Packard Enterprise (HPE) enters its fiscal 2026 second quarter earnings call with significant momentum. Shares closed at $43.04 on Friday after a one-day gain of 12.64%, then advanced to $44.31 during extended trading.
Hewlett Packard Enterprise, HPE
This performance translates to approximately 80% year-to-date appreciation – placing HPE among the top performers in enterprise technology for 2025.
The company announces its quarterly results after the closing bell on Tuesday. Consensus estimates are calling for earnings of $0.54 per share, which represents growth from $0.38 reported in the same quarter last year. Management’s revenue guidance ranges from $9.6 billion to $10.0 billion.
The Street’s EPS forecast is in line with the upper end of HPE’s expected range of $0.51 to $0.55 – setting expectations high with minimal support.
The previous quarter had a strong performance
The first fiscal quarter provided significant positive catalysts for investors. HPE It generated revenue of $9.3 billion, representing an 18% year-over-year expansion, with record non-GAAP earnings per share of $0.65. The company generated $708 million in free cash flow.
Networking has emerged as the clear winner among business sectors. This division achieved revenue growth of 152%, largely supported by the completed acquisition of Juniper Networks. Communication now represents approximately 30% of the company’s total revenue and exceeds half of consolidated operating profit.
This fundamental shift in the makeup of HPE’s business has fueled much of the bullish investor sentiment throughout 2025.
The power of the AI pipeline meets supply constraints
HPE achieved a record $5.0 billion AI systems backlog in the second quarter. The company secured $1.2 billion in new AI systems orders during the first quarter alone.
Market participants will examine conversion rates from backlog to recognized revenue. Leadership has set a target of $1.7 billion to $1.9 billion cumulatively Networks for artificial intelligence Reservations until the end of fiscal year 2026.
On the challenge front, HPE has identified shortages of memory components and NAND flash as persistent headwinds. These supply constraints can restrict shipment volumes and raise input costs. The company previously lowered its cloud and AI revenue growth forecast to mid-to-high single digits, with operating margin expectations for the segment in the 7% to 9% range.
Wall Street is targeting the stock price significantly
Among the 11 analysts covering it, HPE has an average Buy rating — which includes eight Buy recommendations, three Hold ratings, and zero sell calls. However, the average price target is $33, suggesting a potential downside of ~23% from current trading levels.
Both Wells Fargo and Morgan Stanley maintain neutral positions, setting targets of $26 and $25 to $33, respectively. Evercore ISI, JP Morgan, and Citi are all expressing more optimism on buy ratings, though their price targets are hovering near or below the current stock price.
This creates a compelling scenario ahead of Tuesday’s announcement. Meeting consensus expectations alone may be insufficient to extend the rally – investors will likely require elevated full-year guidance from management to maintain upward momentum.
Shares ended Friday’s regular session at $43.04, up 12.64%, before rising to $44.31 in after-hours activity.
