By Angela Palumbo
Hewlett Packard Enterprise stock soared on Tuesday after earnings showed the information tech company is greatly benefiting from the artificial intelligence revolution.
HPE reported fiscal second-quarter adjusted earnings of 79 cents a share on revenue of $10.7 billion after the stock market closed on Monday. That's better than the 53 cents a share on revenue of $9.78 billion expected by the analysts surveyed by FactSet.
The strong results came from rising demand for HPE's products, like servers and networking solutions. These offerings are in incredibly high demand as customers continue building out the infrastructure needed to power AI.
"Large enterprises are pulling-forward server demand to get ahead of supply risks (as servers become increasingly important in an Agentic world)," Morgan Stanley analyst Erik Woodring wrote in a research note on Tuesday.
HPE stock jumped 19% on Tuesday. That's a standout post-earnings stock move for HPE. According to Dow Jones Market Data, HPE stock has gained an average of 0.01% after the last 12 earnings reports.
Woodring added that even though HPE's results were better than expected, it was "not quite DELL's quarter." He raised his price target on HPE to $71 from $33 but maintained an Equal-Wight rating on the stock.
Dell reported much better-than-expected first-quarter financial results after the market closed on May 28. Shares surged 33% on May 29. Dell stock tends to move more than HPE after earnings, though. Shares have risen an average of 5.6% after the last 12 earnings reports.
The major difference between Dell and HPE is size. HPE reported revenue for its Cloud & AI segment, which is the segment that includes its server business, of $7.71 billion. Dell's revenue for its infrastructure solutions group -- the segment that includes servers -- of $29 billion.
HPE said on Monday that it expects fiscal 2026 Cloud & AI revenue growth to be in the low 20% range from the prior year. That implies revenue of about $32.4 billion. Meanwhile, Dell expects its total fiscal year AI server revenue to be $60 billion.
"We've assembled the best portfolio we've ever had at HPE," HPE said in a statement to Barron's on Tuesday. "We significantly differentiated ourselves from others in the market by doubling down on networking with the 2025 acquisition of Juniper Networks, a timely decision because networking is foundational to AI, and offering a complete portfolio across networking, cloud, and AI."
HPE has been focused on growing its networking business. The company closed the acquisition of Juniper Networks in July 2025 following regulatory headwinds. HPE's networking revenue for the quarter was $2.69 billion, just above analyst estimates of $2.68 billion and up 148% from the prior year due to the inclusion of Juniper.
HPE results were impressive and prove that the rising demand for AI is benefiting an array of businesses.
"Our results are durable," CEO Antonio Neri told Barron's on Monday night. "We are creating significant shareholder value through innovation, and to our investors who came with us along the journey -- and in particular through the Juniper acquisition -- thank you."
Write to Angela Palumbo at angela.palumbo@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 02, 2026 17:23 ET (21:23 GMT)
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