HPE Surges 30% After Second-Quarter Revenue Jumps 40%, Posting Biggest EPS Beat Since 2018

Hewlett Packard Enterprise shares rose 30% on Monday after the company reported second-quarter results that far exceeded analyst expectations, driven by surging demand for AI-optimized server infrastructure.

HPE posted adjusted earnings per share of 79 cents against a consensus estimate of 53 cents — the company's largest EPS beat since February 2018. Revenue came in at $10.68 billion, topping the $9.79 billion analysts had projected, and reflecting a 40% increase from the year-earlier period.

Net income reached $624 million, or 44 cents per share. That compares favorably to the year-ago quarter, when HPE reported a net loss of $1.05 billion, or 82 cents per share.

The company's server unit was the standout performer. Server revenue, a sub-division of the Cloud & AI segment, came in at $5.45 billion — nearly $1 billion ahead of the $4.66 billion estimate. Overall Cloud & AI revenue reached $7.71 billion, exceeding the StreetAccount estimate of $6.87 billion.

CEO Antonio Neri told CNBC that traditional server bookings are up triple digits, and that the current backlog is the largest in the company's history.

"Customers continue to invest in modernizing their infrastructure and scaling AI, and our performance shows the strength of our combined networking portfolio," Neri said in a statement announcing the results.

Off the back of the strong quarter, HPE raised its full-year EPS guidance by a full dollar, projecting fiscal year 2026 adjusted EPS of $3.35 to $3.45, up from its prior range of $2.30 to $2.50. The company said it is now tracking two years ahead of its own long-term financial plan.

The earnings release coincided with HPE's announcement at the Computex conference in Taiwan of a new 12th-generation ProLiant server powered by Nvidia's Vera central processing units, which Nvidia said are now in full production.

"This is going to be our new major growth driver," Nvidia CEO Jensen Huang said during his Computex keynote Monday, adding that millions of the new CPUs are currently being manufactured and will be available starting in the fall.

The New York Stock Exchange is among the first customers to commit to the new configuration, intending to use the HPE ProLiant server — which Neri described as optimized for agentic AI workloads — to process more than a trillion messages per day.

"These workloads require high-performance servers with exceptional CPU performance to enable real-time reasoning across agentic AI and financial services applications," Neri said in a press release.

The new server's availability in the fall, combined with a record backlog and raised guidance, signals that enterprise spending on AI infrastructure remains firm heading into the second half of HPE's fiscal year — a dynamic that analysts and investors will be watching closely as competitors report their own results.

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