HPE Posts Record Q2 Revenue and Triggers Broad Analyst Upgrades

Raised analyst price targets follow a quarter that leaves HPE facing the task of converting a record backlog into shipped revenue under strained supply.

Overview

HPE reported record fiscal Q2 revenue of $10.7 billion and non‑GAAP EPS of $0.79 on June 1, beating consensus estimates and delivering all‑time highs in gross margin and free cash flow.
Networking revenue surged 148% to $2.7 billion driven by the Juniper acquisition, data‑center networking climbed 233%, and cloud and AI revenue rose about 23%.
Management raised full‑year FY2026 guidance to 29–33% revenue growth and at least $3.5 billion in free cash flow, and set Q3 EPS guidance at $0.88–$0.93.
Wall Street responded with rapid upgrades and higher price targets—Goldman Sachs lifted its target to $79—while the stock rallied roughly 60% over the prior month and then pulled back about 8% on profit‑taking.
HPE said it intentionally built elevated inventory to secure AI components, reported a record backlog that must be converted to shipped revenue, completed a $1.4 billion H3C stake sale, declared a $0.1425 quarterly dividend, and saw strong institutional buying alongside prearranged insider 10b5‑1 sales.