HPE stock soars on record backlog, booming AI server business

Tue, June 2, 2026 at 3:21 AM UTC

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Hewlett Packard Enterprise (HPE) was poised to open more than 25% higher on Tuesday after the server and networking products maker reported record second-quarter earnings, fueled by a boom in enterprise investments in AI infrastructure.

The company also raised its full-year outlook while accelerating its long-term financial goals by two years, forecasting that demand for its servers will remain strong well into 2027.

“Traditional server orders increased triple digits as customers continue to modernize their compute infrastructure and invest in AI inferencing,” said CEO said Antonio Neri during the company’s earnings call on Monday afternoon.

“Orders more than doubled, significantly outpacing revenue, resulting in a record company backlog,” he added.

Unlike COVID when customers were double booking Neri said, “We don't see that at all. We have no cancellations.”

While training artificial intelligence models requires expensive GPUs, AI inferencing in which tasks are performed can be done on standard CPU-based [central processing unit] traditional servers.

Management explained that corporate customers prefer CPU servers because they can run AI locally and securely on-premises. The trend is boosting HPE sales and driving higher profit margins.

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Revenue in the quarter reached $10.7 billion, up 40%. Adjusted earnings per share of $0.79 increased 108%, blowing past the company’s outlook.

HPE shares jumped nearly 25% over the past two sessions to hit all-time highs, driven by peer Dell’s blowout results last week,

“Hewlett Packard (HPE) – a stock that has never featured on our retail leaderboard – finished as the second most-bought stock today,” a Vanda Research note stated on Monday after the bell.

“In fact, retail investors have bought as much HPE over the last 2 sessions as they did in the prior 11 months combined,” said the note.

HPE has surged more than 90% year-to-date.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.

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Source: “AOL Money”