Key Takeaways for HPE Stock as of September 2026
- Blowout Beat: HPE posted Q3 revenue of $12.21 billion against Street estimates of $11.99 billion, and adjusted EPS of $1.11 crushed the $0.94 estimate by 18%, up 152% YoY.
- Guidance Raised Twice: Management lifted FY26 EPS guidance to $3.75-$3.85 and introduced a stronger FY27 framework calling for 13% to 17% total revenue growth and EPS of $4.40 to $4.60.
- Orders Outrunning Revenue: Total orders grew 42% on a normalized basis, well ahead of the 34% revenue growth, and networking orders climbed 36%, roughly 3.5 times faster than networking revenue, pushing backlog to a record.
- On-Premise AI Economics: CEO Antonio Neri said HPE’s own internal deployment shows private cloud AI can cut token costs versus the public cloud by up to 60%, a big part of why enterprise demand keeps accelerating.
HPE Stock Posts a Record Quarter, but Supply Still Can’t Keep Up With Orders
Hewlett Packard Enterprise (HPE) delivered fiscal third-quarter revenue of $12.21 billion, up 34% year over year and well ahead of the $11.99 billion Street had modeled. Adjusted EPS came in at $1.11, topping the $0.94 estimate by 18% and marking the first quarter in company history that non-GAAP EPS cleared $1. Net income of $1.61 billion beat estimates by 20%, and EBIT margin expanded 770 basis points year over year to 16.20%.
The print looked clean across every line, but the more telling number sat below revenue: orders. Total bookings grew 42% on a normalized basis, outpacing the 34% revenue growth, and HPE booked more orders than any prior quarter in its history. Networking orders told the sharper version of that story, up 36% against just 10% normalized revenue growth, a gap CEO Antonio Neri attributed to component shortages rather than soft demand. Data center switching and routing orders reached their highest backlog ever, driven by hyperscaler and neo-cloud AI infrastructure buildouts, including a newly announced multi-gigawatt networking deal with Oracle.
That backlog dynamic is why guidance moved twice in one call. HPE raised its FY26 EPS range to $3.75 to $3.85 and lifted free cash flow guidance to at least $3.75 billion. For FY27, management now expects consolidated revenue growth of 13% to 17% and EPS of $4.40 to $4.60, a framework built without including any contribution from the AMD Helios AI training platform slated to ramp later this year.
Neri leaned hardest on the durability of enterprise AI spending, pointing to internal usage data on Q3 2026 earnings call: “According to our own internal analysis, our PCAI offering can reduce token costs versus the public cloud by up to 60%.” That cost gap, he argued, is what’s pulling budget from pilot projects into production deployments, with more than 1,200 internal AI use cases already running at HPE itself. Storage revenue grew 10% on richer mix, and GreenLake customers rose 18% to 52,000, reinforcing that the AI wave is broadening past server sales into HPE’s higher-margin software and services lines.
TIKR Values HPE Stock at $54, a Modest Premium to Current Levels
TIKR’s mid-case model values HPE at $54 by October 2030, implying 5% total return from the current price of $52, or 1% annualized over 4.2 years.
That is a narrow gap for a stock that just posted 34% revenue growth and record backlog, signaling the market has already priced in much of the near-term AI upside HPE reported this quarter. The model’s modest annualized return puts HPE stock well behind the kind of double-digit compounding investors typically demand from a company guiding to mid-teens operating profit growth.
The target reflects HPE’s own raised FY27 framework of 13% to 17% revenue growth and $4.40 to $4.60 in EPS, both of which assume continued backlog conversion as supply constraints ease.
With orders still running 3.5 times ahead of networking revenue and AI systems backlog up 14% sequentially, the model’s mid-case scenario treats HPE’s current bottleneck as temporary rather than structural, which is exactly the dynamic Neri described on the call.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
