Key facts
- HPE raised its annual revenue and earnings forecasts.
- Quarterly revenue increased by 33.6% to $12.21 billion.
- Adjusted earnings per share for the quarter were $1.11.
- The company cited strong demand for AI-related servers and networking equipment.
- Supply constraints, especially for memory, were noted as a bottleneck.
Hewlett Packard Enterprise (HPE) has raised its annual financial forecasts, driven by strong quarterly revenue that exceeded Wall Street expectations. The company attributed its performance to a surge in demand for AI-related servers and networking equipment, essential for building and training artificial intelligence models.
According to HPE's CFO Marie Myers, the market is experiencing significant tailwinds from AI adoption, particularly within enterprises. She indicated that this trend is expected to support growth beyond the current fiscal year, as customers move from testing AI systems to full deployment and realize productivity gains.
HPE projects fiscal 2026 revenue growth between 34% and 37%, an increase from its previous forecast of 29% to 33%. The adjusted earnings forecast was also raised to between $3.75 and $3.85 per share, up from $3.35 to $3.45. For fiscal 2027, revenue growth is now projected at 13% to 17%, up from 8% to 12%, with adjusted EPS growth expected at 16% to 20%, compared to the prior 12% to 16% outlook.
In the third quarter, HPE's revenue grew by 33.6% to $12.21 billion, surpassing the estimated $11.91 billion. Adjusted earnings per share came in at $1.11, ahead of the 93 cents expected by analysts. Myers acknowledged that supply remains constrained, with memory being the primary bottleneck, followed by NAND, CPUs, and drives, although HPE has secured longer-term supply agreements to improve component access. The demand for HPE's AI-powered servers is significantly outpacing supply.