HPE shares show volatility despite strong Q3 results, as the firm reports $2.4 billion in AI orders and raises long-term growth guidance, even as profitability margins face headwinds.
HPE reported strong revenue growth, raised FY2026 guidance, and saw AI orders increase, though profitability margins declined.
Mentioned as a competitor in AI server hardware, with P/E comparison suggesting HPE is undervalued relative to Dell.
Mentioned as one of the few firms providing hardware for AI servers alongside HPE and Dell.
Hewlett Packard Enterprise reported a 16.2% revenue jump and raised its fiscal 2026 growth guidance to 37%, signaling sustained momentum in its AI server business. Despite the strong top-line performance and a surge in AI orders, the company faces ongoing pressure on operating margins, which saw a decline in its networking segment.
While networking revenue grew by 75%, management noted that orders are growing 3x to 5x faster than revenue, which could lead to delays in revenue recognition.
HPE and Dell are both key providers of AI server hardware, but HPE currently trades at a lower forward P/E multiple of 12.85 compared to Dell's 20.