HPE lifts 2028 targets with AI-driven growth

Hewlett Packard Enterprise posted record Q2 revenue of $10.68bn, up 40% year-on-year, as enterprise and government AI demand lifted server and networking sales. HPE raised its fiscal 2026 revenue outlook, introduced a stronger fiscal 2027 growth framework and said total AI backlog exceeded $6.3bn. The result signals a sharper enterprise AI infrastructure cycle, with Q4 revenue conversion now the key near-term test.

• Q2 revenue hits $10.68bn with 40% year-on-year growth

• Enterprise AI adoption and dynamic pricing enhance market position

The fact

Hewlett Packard Enterprise posted record Q2 revenue of $10.68bn, up 40% year-on-year, surpassing analyst estimates. Adjusted EPS reached $0.79 versus $0.53 expected. Strong AI workload demand from enterprise and government clients drove server and networking sales. HPE raised fiscal 2026 revenue growth guidance to 29-33%, introduced a fiscal 2027 growth framework of 8-12%, and reported more than $6.3bn in AI backlog, with 61% from large enterprises and government clients.

The Assessment

The result shows enterprise AI moving from experimental demand into a visible infrastructure spending cycle. HPE benefits because the demand sits close to its server and networking businesses, not only specialised AI systems. The Juniper integration adds routing and campus networking exposure, positioning HPE to capture full-stack data centre and enterprise network upgrades. The signal is broad-based, but the upside is not unlimited: the next proof point is whether backlog converts into recognised revenue without weakening margins as memory costs rise.

What to Watch

Watch Q4 AI backlog conversion into recognised revenue, memory cost impact on margins, and whether Dell or Super Micro match HPE's pricing agility.