HPE shares jump 37% after raising 2026 revenue forecast on AI demand

In short: Hewlett Packard Enterprise raised its 2026 sales forecast as more customers buy data center hardware to run AI, and its shares jumped 37%.

What happened

Hewlett Packard Enterprise, often called HPE, said it expects sales to grow 29% to 33% in its 2026 financial year. That is higher than the 17% to 22% range it predicted in March. After the update, HPE shares rose to $64.64 in after-hours trading, a record high.

HPE sells the equipment that helps power data centers, which are large buildings filled with computers. You can think of a data center like a warehouse for computing, and AI is one of the biggest reasons companies are building more of them.

HPE said quarterly sales rose 40% to $10.7bn for the period ending April 30. Analysts had expected about $9.8bn, according to Visible Alpha. The company also reported net income of $595mn, compared with a $1.1bn loss a year earlier.

A big driver was networking, which is the gear that connects computers so they can work together (like roads connecting towns). Revenue in HPE’s networking division jumped 148% to $2.7bn. Server revenue rose 32.7% to $5.5bn.

Why it matters

This is another sign that companies are spending heavily on the physical “plumbing” behind AI, not just on the software people see on screens. Four large tech firms, Google, Amazon, Meta and Microsoft, are on track to spend more than $725bn on AI infrastructure this year, the Financial Times reported. That spending is helping hardware suppliers like HPE and Dell, and it can also shape prices and availability for the computing equipment many businesses rely on.

Source: Financial Times