Hewlett Packard Enterprise saw its shares rise nearly 29% in premarket trading on Tuesday after the company accelerated its long-term financial targets by two years and reported an uptick in demand for AI-related infrastructure.
Management said sustained purchases from large enterprises and hyperscalers are pushing demand for HPE’s servers and networking products higher. Companies are bringing forward buying decisions to reduce exposure to supply disruptions amid rising memory chip prices, a dynamic that has supported stronger pricing for servers.
HPE raised its fiscal 2026 revenue growth forecast on Monday to a range of 29% to 33%, up from the prior guidance of 17% to 22%. The company also boosted its networking segment growth outlook to 72% to 75%, from an earlier 68% to 73% range. In addition, HPE said its revised fiscal 2026 ranges for adjusted earnings per share and free cash flow are higher than the levels it had expected to reach by fiscal 2028.
Hyperscalers, including Alphabet and Amazon, are projected to spend more than $700 billion on AI infrastructure this year, a scale of investment that the company expects to support demand for servers and networking equipment. The company competes in the enterprise server market with firms such as Dell Technologies and Super Micro Computer.
Market analysts pointed to a common pricing trend across the server sector. Morgan Stanley analysts noted that customers are absorbing notably higher server prices with little sign of demand destruction, a pricing dynamic that has contributed to positive surprises at peers.
Shares of Dell and Super Micro Computer rose in sympathy, gaining about 3% and 5% respectively.
HPE’s chief financial officer, Marie Myers, said the quarter’s notable shift was that enterprise customers are increasingly adopting agentic AI as a central workload - a change that is reshaping demand patterns. The company indicated that its updated fiscal 2026 targets for adjusted EPS and free cash flow exceed the performance it had previously expected to achieve by fiscal 2028.
Valuation metrics also featured in the report: HPE’s 12-month forward price-to-earnings ratio stood at 15.93, compared with Dell’s 24.14 and Cisco’s 25.56.
Context and implications
- Elevated server pricing coupled with accelerated purchasing is driving near-term revenue visibility for HPE.
- Hyperscaler investment levels are cited as a material tailwind for AI infrastructure vendors.
- Peer stocks in the enterprise server and systems space moved higher on the company-specific news.
The company’s stronger near-term guidance and the market reaction underline the link between AI infrastructure spending and vendor financial trajectories, while also highlighting sensitivity to component supply and pricing.