Hewlett Packard Enterprise Q2 2026 Earnings Call Recap: AI Demand Drives Beat
Hewlett Packard Enterprise (HPE) reported second-quarter fiscal 2026 results that topped Wall Street expectations, driven by robust demand for artificial intelligence infrastructure and improved profitability in its high-performance computing and AI segment. The company posted adjusted earnings per share of $0.52 on revenue of $7.4 billion, compared with consensus estimates of $0.49 and $7.1 billion, respectively.
Revenue grew 12% year over year, with the HPC & AI segment surging 38% as enterprises and cloud providers continue to invest in GPU-accelerated systems and networking for AI workloads. HPE's Intelligent Edge and compute businesses also posted modest gains, though traditional server sales remained under pressure amid a broader shift toward AI-optimized architectures.
“Our Q2 results reflect the strong tailwind from enterprises adopting AI at scale,” said CEO Antonio Neri during the earnings call. “We're seeing sustained momentum across our AI-native portfolio, including our Cray supercomputers, HPE GreenLake cloud services, and Aruba networking.”
Gross margin expanded to 34.2% from 32.8% a year ago, supported by higher-margin AI contracts and cost discipline. Operating cash flow came in at $1.2 billion, up from $0.9 billion in the prior-year quarter.
Looking ahead, HPE raised its full-year fiscal 2026 adjusted EPS guidance to a range of $1.98–$2.04, up from $1.92–$1.98 previously, citing continued strength in AI bookings. The company also increased its quarterly dividend by 5% to $0.14 per share.
Analysts noted that HPE is benefiting from the broader AI arms race as companies rush to build out computing capacity. “HPE's pivot from traditional hardware to AI-centric solutions is paying off,” said Morgan Stanley analyst Katy Huberty. “The Q2 print and raised guidance suggest the cycle has further to run.”
Shares of HPE rose 3.8% in after-hours trading following the release. The stock has gained roughly 22% year to date, outpacing the S&P 500's 9% advance, as investors increasingly value AI-exposed enterprise hardware plays.