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HPE Raises Outlook as AI Backlog Tops $5 Billion, Shifts to Higher-Margin Orders

Management signals a margin-first approach under tight supply, with cost pressures persisting through 2027.

Overview

  • First-quarter revenue reached $9.30 billion, up 18% year over year, and adjusted EPS came in at $0.65, topping estimates.
  • Second-quarter revenue guidance of $9.60 billion to $10.0 billion exceeded consensus, and full-year adjusted EPS was raised to $2.30–$2.50.
  • AI infrastructure orders in backlog surpassed $5 billion, with 64% from enterprise and sovereign customers.
  • HPE will emphasize higher-margin products and shorter quoting cycles, keeping pricing flexible as supply remains constrained and component costs stay elevated through 2027.
  • The company lifted networking segment growth guidance to 68%–73% following Juniper integration, and shares gained about 1.3% after hours.