TLDR
- HPE posted record Q2 FY2026 revenue of $10.7 billion, up 40% year-over-year, beating the $9.76 billion consensus estimate
- EPS came in at $0.79, well above the $0.54 analyst estimate, with all-time highs in gross margin and free cash flow
- Networking revenue surged 148% year-over-year to $2.7 billion, boosted by the Juniper Networks acquisition
- Goldman Sachs raised its price target from $32 to $79, and the consensus target is now $64.65 with a Moderate Buy rating
- HPE raised full-year FY2026 guidance, now projecting revenue growth of 29–33% and free cash flow of at least $3.5 billion
HPE stock opened at $49.16 on Friday, down 8.4% on the day, though the stock has still gained more than 60% over the past month — one of the best-performing large-cap tech names in May.
Hewlett Packard Enterprise Company, HPE
The drop comes after a massive run following HPE’s fiscal Q2 2026 earnings on June 1, which blew past expectations across the board.
Revenue came in at $10.68 billion, a 40% jump year-over-year and well ahead of the $9.76 billion analyst consensus. EPS hit $0.79, crushing the $0.54 estimate by $0.25.
It wasn’t just the top and bottom line. HPE hit all-time highs in gross margin, non-GAAP EPS, and free cash flow in a single quarter. GAAP gross margins reached 36.5%, up 810 basis points year-over-year.
The networking segment was the standout. Revenue there surged 148% to $2.7 billion, driven by the Juniper Networks acquisition. Data center networking alone was up 233%.
The cloud and AI segment grew 23% to $7.7 billion, with server revenue up 33%. The numbers reflect strong demand in the AI infrastructure buildout.
Goldman Sachs More Than Doubles Price Target
Goldman Sachs moved swiftly after the print. The firm raised its price target from $32 to $79 on June 3 and kept its Buy rating. The bank cited increased confidence in HPE’s position in AI infrastructure.
Goldman wasn’t alone. Loop Capital upgraded the stock from Hold to Buy and raised its target from $23 to $75. Barclays lifted its target to $67 with an Overweight rating. Raymond James went to $74 with an Outperform. Argus went to $70 with a Buy.
The consensus price target now sits at $64.65, with 11 analysts at Buy and 10 at Hold.
Guidance and Dividend
Off the back of the strong quarter, HPE raised its full-year FY2026 guidance. The company now sees revenue growth of 29–33% and free cash flow of at least $3.5 billion. Q3 EPS guidance was set at $0.88–$0.93.
HPE also declared a quarterly dividend of $0.1425 per share, payable July 15 to shareholders of record on June 16.
On the institutional side, Havemeyer Place LP opened a new position worth roughly $3.28 million. Multiple other funds increased their stakes in Q4, including Vise Technologies, which grew its position by 72.9%. Institutional investors now own 80.78% of the stock.
CEO Antonio Neri sold 150,000 shares at $26.50 on April 17 under a pre-arranged 10b5-1 plan. EVP Fidelma Russo sold 17,001 shares at $27.97 on April 21, also under a 10b5-1 plan.
HPE carries a 12-month low of $17.49 and a 12-month high of $64.25. The stock’s 50-day moving average stands at $31.65, with a 200-day moving average of $25.64.
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