Hewlett Packard Enterprise Reports Strong Q1 2026 Earnings with Record EPS
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 10 2026
0mins
Should l Buy HPE?
Source: seekingalpha
- Significant Revenue Growth: Hewlett Packard Enterprise reported Q1 2026 revenue of $9.3 billion, an 18% year-over-year increase despite a 4% sequential decline, exceeding market expectations and demonstrating strong performance in networking and cloud sectors.
- Strong Networking Performance: The networking segment saw a remarkable 152% revenue increase, now accounting for nearly 30% of total revenues and contributing over half of the operating profits, indicating a solidifying leadership position in the networking market.
- Surge in AI System Orders: The company entered Q2 with a record AI systems backlog of $5 billion, despite a 3% revenue decline in Cloud & AI, with operating margins rising 18%, highlighting robust demand and future growth potential in the AI market.
- Optimistic Outlook: Management raised the fiscal 2026 EPS outlook to $2.30 to $2.50 and increased free cash flow expectations to at least $2 billion, reflecting confidence in future performance and a commitment to disciplined long-term investments.
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Analyst Views on HPE
Wall Street analysts forecast HPE stock price to fall
16 Analyst Rating
8 Buy
8 Hold
0 Sell
Moderate Buy
Current: 30.040
Low
21.00
Averages
27.13
High
31.00
Current: 30.040
Low
21.00
Averages
27.13
High
31.00
About HPE
Hewlett Packard Enterprise Company is a global technology company focused on developing intelligent solutions that allow customers to capture, analyze and act upon data seamlessly from edge to cloud. Its customers range from small-and-medium-sized businesses to large global enterprises and governmental entities. Its segments include Server, Hybrid Cloud, Networking, Financial Services, and Corporate Investments and Other. Its Server segment offerings consist of general-purpose servers for multi-workload computing, workload-optimized servers, and integrated systems. Its Hybrid Cloud segment offers a range of cloud-native and hybrid solutions across storage, private cloud and the infrastructure software-as-a-service space. The Networking segment develops and sells high-performance networking and security products and services. Its Financial Services segment provides flexible investment solutions, such as leasing, financing, IT consumption, utility programs, and asset management services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- AI Trade Remains Stable: Microsoft and Google's backlog exceeds $1 trillion, indicating robust demand in the AI sector that supports growth potential for related companies like Broadcom and Marvell, further solidifying market confidence in the AI trade.
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See More
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- Market Share Growth: Dell is projected to capture a 12% share of the AI server market by 2026, valued at $496 billion, while HPE is also expected to benefit from its premium AI server offerings, estimating $6.5 billion in revenue by 2026.
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- Potential Scandal Risk: Analysts suggest that Oracle's move may be an attempt to distance itself from allegations against Super Micro co-founder Yih-Shyan 'Wally' Liaw regarding illicit sales of Nvidia chips to China, which could lead to further contract losses and exacerbate Super Micro's market challenges.
- Sales Decline Trend: Super Micro is also experiencing sales losses to xAI, which may not be directly related to SpaceX's IPO; however, SpaceX's refusal to purchase Super Micro's older B200 GPU chips in favor of faster products from Dell and Hewlett Packard Enterprise could result in inventory backlog for Super Micro.
- Market Valuation Drop: Despite an 18.5% decline in stock price over the past year, Super Micro's current price-to-earnings ratio stands at 21, and analysts project a 26% growth in earnings over the next five years, suggesting that the investment value of Super Micro may be emerging as risks are priced in.
See More
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See More
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