Hewlett Packard Enterprise HPE is scheduled to report third-quarter fiscal 2026 results on Sept. 2, after market close.
For the third quarter of fiscal 2026, HPE expects revenues in the range of $11.5-$12.1 billion. The Zacks Consensus Estimate is pegged at $12.1 billion, suggesting growth of approximately 32% from the year-ago quarter’s reported figure.
For the fiscal third quarter, the company anticipates non-GAAP earnings per share of 88-93 cents. The Zacks Consensus Estimate for HPE’s fiscal third-quarter earnings is pegged at 94 cents per share, reflecting a 113.6% increase year over year. The consensus mark for earnings has been revised upward in the past 30 days.
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HPE’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 16%.
Hewlett Packard Enterprise Company Price and EPS Surprise
Hewlett Packard Enterprise Company price-eps-surprise | Hewlett Packard Enterprise Company Quote
Earnings Whispers for HPE Stock
Our proven model predicts an earnings beat for HPE this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is exactly the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
HPE has an Earnings ESP of +6.54% and currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors to Influence HPE’s Q3 Results
Hewlett Packard Enterprise’s third-quarter fiscal 2026 performance is likely to benefit from the company’s ongoing mix shift toward higher-value networking, cloud and AI solutions. HPE’s expanded networking portfolio across campus and branch, data center switching, routing and security is likely to have a positive impact on the to-be-reported quarter.
AI infrastructure demand remains a key growth catalyst. HPE is seeing increasing customer investments in AI inferencing, agentic AI and data-intensive workloads, supporting demand for its compute, networking and storage offerings. HPE’s hybrid cloud strategy should also remain supportive in the third quarter of fiscal 2026.
The company is also expanding its turnkey AI Factory and Private Cloud AI solutions, including offerings co-engineered with NVIDIA, to help enterprises deploy AI workloads across data centers, edge environments and private clouds. Continued adoption of these solutions could support order growth and backlog expansion in the to-be-reported quarter.
GreenLake enables customers to manage on-premises, colocation and public cloud environments through a consumption-based model, while acquisitions such as Morpheus and OpsRamp have expanded its orchestration, automation, monitoring and observability capabilities and are likely to have traction in the third quarter of fiscal 2026.
The company’s server business is also positioned to benefit from infrastructure modernization and AI adoption in the to-be-reported quarter. HPE is expanding its ProLiant portfolio for AI and large-scale data processing workloads, while its high-performance computing platforms remain relevant for increasingly demanding workloads.
HPE Stock Price Performance & Valuation
In the year-to-date period, HPE shares have surged 126.6%, outperforming the Zacks Computer - Integrated Systems industry’s growth of 103.3%.
HPE YTD Performance Chart
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HPE stock trades at a discounted price with a forward 12-month price-to-sales (P/S) multiple of 1.45X compared with the industry’s 5.26X.
HPE Forward 12-Month (P/S) Valuation Chart
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Investment Thesis for HPE
HPE operates in a global cloud space that contains other massive players like Amazon and Microsoft MSFT, and the server space has strong competitors like Dell Technologies DELL and Super Micro Computer SMCI. Amazon, through its Amazon Web Services, dominates services, including compute, storage, AI/ML, and hybrid offerings like Outposts and EKS Anywhere.
Microsoft has a strong presence among enterprises because of its Azure Stack. Microsoft’s collaboration with AI has equipped it with AI Factory-like deployments. In the server space, Dell Technologies is capitalizing on the strong demand for its servers across industries, driven primarily by ongoing digital transformation and the adoption of generative AI applications. DELL has experienced sequential growth in server adoption.
For Super Micro Computer, the exposure to AI infrastructure remains a central growth driver. The AI solutions represented about 60% of SMCI’s fourth-quarter fiscal 2026 revenues because several large projects shifted timing, and management said more than $60 billion of new orders were received during the fourth quarter. However, HPE, with its combination of compute, storage, networking and services, will enable the company to win customers in the long run.
HPE enters the fiscal third quarter with several structural growth drivers. The Juniper acquisition has transformed the company’s networking opportunity, while AI infrastructure, private cloud and hybrid IT are expanding its addressable market. The new-age ProLiant server powered by NVIDIA’s Vera CPU will help it lead in the agentic AI infrastructure space.
HPE’s improving cash generation also provides support for shareholder returns and investment in growth initiatives. The company generated strong operating and free cash flow in the fiscal second quarter and continued returning capital through dividends and share repurchases. These factors will keep investor confidence.
Conclusion: Buy HPE Stock Now
Hewlett Packard Enterprise enters its fiscal third quarter with strong growth drivers from AI infrastructure, networking, hybrid cloud and private cloud solutions. Expected revenues of up to $12.1 billion and rising earnings estimates highlight solid prospects. Its Juniper acquisition, expanding AI portfolio and improving cash generation further support long-term growth and shareholder returns. Given these factors, we suggest investors accumulate this stock at present.
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This article originally published on Zacks Investment Research (zacks.com).