Hewlett Packard Enterprise Company

New York Stock Exchange
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Bullish +65

AI Server Stocks Slide as Two-Day Run Unwinds: Hewlett Packard Enterprise Sinks 4%, Dell Pulls Back, Super Micro Sits Out the Selloff

AI-generated analysis

📉 HPE shares dropped 4% to $56.37 on Thursday as profit-taking ensued after a two-day rally following blowout AI infrastructure earnings.

💰 The company reported fiscal Q3 2026 non-GAAP EPS of $1.11 versus a $0.93 consensus, with revenue reaching $12.21 billion, up 32.7% year over year.

🚀 Networking revenue jumped 74.9% to $2.89 billion, highlighting the strength of HPE's AI server and connectivity portfolio.

📈 HPE raised its fiscal 2026 non-GAAP EPS guidance to $3.75-$3.85 and increased its free cash flow target to at least $3.75 billion.

💬 CEO Antonio Neri described AI as a multi-year growth driver, noting that demand currently exceeds available supply for critical components like DDR5 memory.

📅 The company raised its fiscal 2027 free cash flow floor to at least $5 billion, demonstrating robust long-term financial planning.

📊 HPE stock remains up 134% year-to-date, indicating that the recent decline is primarily a profit-taking event rather than a fundamental deterioration.

Bullish Signals
  • Hewlett Packard Enterprise reported fiscal Q3 2026 non-GAAP EPS of $1.11, significantly beating the $0.93 consensus estimate.
  • The company achieved revenue of $12.21 billion in Q3, representing a robust 32.7% year-over-year increase driven by AI infrastructure demand.
  • Networking revenue surged 74.9% to $2.89 billion, underscoring the rapid growth in HPE's high-performance computing and connectivity segments.
  • Management raised fiscal 2026 non-GAAP EPS guidance to a range of $3.75 to $3.85, reflecting confidence in sustained earnings growth.
  • The company increased its free cash flow target to at least $3.75 billion for fiscal 2026 and raised the fiscal 2027 floor to $5 billion.
Risk Factors
  • Shares declined 4% on Thursday as investors engaged in profit-taking after a two-day rally, despite no new negative company-specific news.
  • The stock has already appreciated 134% year-to-date, making the current pullback a likely realization of gains rather than a reaction to poor fundamentals.
Full Analysis
Hewlett Packard Enterprise (HPE) shares fell 4% to $56.37 on Thursday as investors took profits following a two-day rally driven by strong earnings. The decline occurred without any new negative company-specific catalysts, occurring while the broader technology sector saw minor pullbacks in major ETFs like the iShares U.S. Technology ETF and Invesco QQQ Trust. HPE reported fiscal Q3 2026 results on September 2 with non-GAAP EPS of $1.11, beating the consensus of $0.93, and revenue of $12.21 billion, up 32.7% year over year. Networking revenue specifically surged 74.9% to $2.89 billion. The company raised its fiscal 2026 non-GAAP EPS guidance to a range of $3.75 to $3.85 and increased its free cash flow target to at least $3.75 billion for the year. Despite the stock price dip, HPE maintains significant momentum with a year-to-date gain of 134%. CEO Antonio Neri identified AI as a multi-year growth driver, noting that demand currently exceeds available supply for key components like DDR5 memory and NAND flash. The company also raised its fiscal 2027 free cash flow floor to at least $5 billion, signaling continued financial strength despite the short-term price correction.