Hewlett Packard Enterprise (HPE) Stock Pulls Back 8% Following Stellar 60% Surge — Time to Buy?

Key Highlights

• HPE delivered record fiscal Q2 2026 revenue of $10.7 billion, representing a 40% year-over-year increase and surpassing the $9.76 billion analyst projection
• Earnings per share reached $0.79, significantly exceeding the $0.54 consensus forecast, while posting record gross margins and free cash flow
• The networking division experienced explosive 148% year-over-year growth to $2.7 billion, primarily fueled by the Juniper Networks integration
• Goldman Sachs more than doubled its price target from $32 to $79, while the Street consensus now stands at $64.65 with a Moderate Buy rating
• The company upgraded its full-year FY2026 outlook, anticipating revenue expansion of 29–33% alongside free cash flow exceeding $3.5 billion

Shares of HPE began Friday trading at $49.16, representing an 8.4% decline for the session, yet the stock has still delivered an impressive 60%+ return over the trailing month — ranking among May’s top-performing large-cap technology stocks.

Hewlett Packard Enterprise Company, HPE

The pullback follows an extraordinary rally triggered by HPE’s fiscal second quarter 2026 financial results released June 1, which exceeded projections on virtually every metric.

Total revenue reached $10.68 billion, marking a 40% year-over-year expansion and substantially beating the $9.76 billion Street estimate. Earnings per share landed at $0.79, demolishing the $0.54 consensus by an impressive $0.25.

The performance extended beyond headline figures. HPE achieved simultaneous record levels in gross margin, non-GAAP EPS, and free cash flow within the same reporting period. GAAP gross margins climbed to 36.5%, representing an 810 basis point year-over-year improvement.

The networking division emerged as the primary growth driver. This segment skyrocketed 148% to $2.7 billion, powered largely by the completed Juniper Networks acquisition. Data center networking specifically jumped 233%.

Meanwhile, the cloud and AI segment expanded 23% to $7.7 billion, with server revenue climbing 33%. These figures underscore robust demand tied to the AI infrastructure expansion cycle.

Goldman Sachs Dramatically Increases Price Forecast

Goldman Sachs responded quickly following the earnings announcement. On June 3, the firm elevated its price target from $32 straight to $79 while maintaining its Buy rating. The bank pointed to growing conviction in HPE’s strategic positioning within AI infrastructure markets.

Goldman was joined by several peers. Loop Capital upgraded shares from Hold to Buy while boosting its target from $23 to $75. Barclays increased its forecast to $67 with an Overweight rating. Raymond James moved to $74 with an Outperform stance. Argus established a $70 target with a Buy recommendation.

The Wall Street consensus price target currently rests at $64.65, with 11 analysts rating the stock a Buy and 10 maintaining Hold ratings.

Updated Guidance and Shareholder Returns

Leveraging the momentum from its exceptional quarter, HPE elevated its full-year FY2026 projections. Management now anticipates revenue growth ranging from 29–33% with free cash flow of no less than $3.5 billion. Third quarter EPS guidance was established at $0.88–$0.93.

The company also announced a quarterly dividend of $0.1425 per share, scheduled for July 15 payment to shareholders on record as of June 16.

Regarding institutional activity, Havemeyer Place LP initiated a fresh position valued at approximately $3.28 million. Several additional funds expanded their holdings during Q4, including Vise Technologies, which increased its stake by 72.9%. Institutional ownership now represents 80.78% of outstanding shares.

CEO Antonio Neri divested 150,000 shares at $26.50 on April 17 through a pre-established 10b5-1 trading plan. EVP Fidelma Russo sold 17,001 shares at $27.97 on April 21, likewise executing through a 10b5-1 arrangement.

HPE’s 52-week trading range spans from a low of $17.49 to a high of $64.25. The stock’s 50-day moving average currently sits at $31.65, while its 200-day moving average registers at $25.64.

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