HPE revenue beats estimates on AI hardware demand
Hewlett Packard Enterprise beat revenue estimates, driven by strong demand for AI hardware, signaling robust enterprise AI infrastructure investment.
HPE's Q1 2026 revenue reached $9.3 billion, an 18% year-over-year increase, driven by networking and disciplined execution in cloud and AI. This led to a record EPS of $0.65, exceeding expectations. The networking segment saw massive growth, with revenue up 152%, fueled by the integration of Juniper Networks. HPE is targeting $1.7B–$1.9B in AI networking orders by the end of fiscal year 2026. Despite a slight dip in Cloud & AI revenue, HPE's AI systems orders hit $1.2 billion with a record $5 billion backlog, indicating strong future growth. A key area to watch is HPE's ability to convert this backlog into realized revenue, particularly from enterprise and sovereign cloud projects. HPE is navigating industry-wide memory shortages by securing multi-year supply deals and implementing agile pricing. CEO Antonio Neri noted strong customer demand with no pushback on pricing, even with inflation.
