HPE Forecasts Revenue Beat as AI Server Backlog Surpasses $5 Billion
Hewlett Packard Enterprise (HPE) has raised its fiscal 2026 earnings outlook and projected second-quarter revenue above analyst estimates, driven by surging demand for AI-optimized servers. Despite a slight revenue miss in the first quarter, the company’s AI backlog has grown to over $5 billion, signaling robust long-term demand from enterprise and sovereign clients.
Key Takeaways
- Hewlett Packard Enterprise (HPE) has raised its fiscal 2026 earnings outlook and projected second-quarter revenue above analyst estimates, driven by surging demand for AI-optimized servers.
- Despite a slight revenue miss in the first quarter, the company’s AI backlog has grown to over $5 billion, signaling robust long-term demand from enterprise and sovereign clients.
Mentioned
Key Intelligence
Key Facts
- 1Q2 revenue forecast of $9.6B–$10.0B exceeds the $9.58B analyst consensus.
- 2AI server backlog reached $5B+, up from $4.7B in the previous quarter.
- 3Enterprise and sovereign customers now represent 64% of the AI order mix.
- 4Fiscal 2026 adjusted EPS guidance raised to a range of $2.30 to $2.50.
- 5Q1 revenue grew 18% year-over-year to $9.30 billion.
Who's Affected
Analysis
Hewlett Packard Enterprise is emerging as a primary beneficiary of the massive capital expenditure cycle currently gripping the technology sector. By forecasting second-quarter revenue between $9.6 billion and $10.0 billion—comfortably ahead of the $9.58 billion Wall Street consensus—HPE is signaling that the appetite for AI-powered infrastructure remains insatiable. This optimistic outlook is underpinned by a significant expansion in the company’s AI server backlog, which now exceeds $5 billion. Perhaps more importantly for long-term profitability, the composition of this backlog is shifting; 64% of orders now originate from enterprise and sovereign customers, a segment that typically offers higher margins than the high-volume, low-margin deals often associated with Tier-1 hyperscalers.
The broader market context for HPE’s performance is defined by the "Big Tech" arms race. Companies like Alphabet, Microsoft, Amazon, and Meta are projected to spend upwards of $630 billion on AI infrastructure this year alone. While these giants often build their own proprietary hardware or work directly with original design manufacturers (ODMs), the broader enterprise market is turning to established vendors like HPE, Dell, and Super Micro Computer to bridge the gap between raw silicon and operational data centers. HPE CEO Antonio Neri’s report of double-digit order growth across all segments suggests that the AI boom is lifting the entire portfolio, not just specialized server lines.
By forecasting second-quarter revenue between $9.6 billion and $10.0 billion—comfortably ahead of the $9.58 billion Wall Street consensus—HPE is signaling that the appetite for AI-powered infrastructure remains insatiable.
However, the path to AI dominance is not without friction. HPE is currently navigating a highly competitive landscape where supply chain costs, particularly for high-bandwidth memory chips, are volatile. These memory components are essential for keeping Nvidia’s high-speed processors fed with data, and their rising costs have forced HPE and its rivals to implement price hikes. This dynamic explains why HPE’s first-quarter revenue of $9.30 billion slightly missed estimates despite the strong demand; the timing of shipments and the pass-through of component costs can create quarterly fluctuations. Nevertheless, the company’s ability to exceed earnings-per-share estimates—posting $0.65 against a $0.59 forecast—indicates disciplined operational execution and a successful shift toward higher-value software and services.
What to Watch
When compared to its peers, HPE has some ground to make up in terms of market sentiment. While Dell has seen its stock rise over 16% this year, HPE shares have lagged with a 9% decline prior to this earnings announcement. This performance gap highlights the pressure on Neri and his leadership team to prove that HPE can scale its AI business as efficiently as its competitors. The raised fiscal 2026 adjusted EPS guidance to $2.30–$2.50 is a clear attempt to reassure investors that the current infrastructure build-out will translate into sustained bottom-line growth.
Looking ahead, the "sovereign AI" trend—where nations invest in domestic computing power to ensure data residency and technological independence—represents a massive tailwind for HPE. With a significant portion of its backlog already tied to these types of high-security, high-reliability contracts, HPE is positioning itself as the preferred partner for governments and large-scale enterprises that require more than just raw compute. As the industry moves from the initial training phase of large language models into the inference and deployment phase, HPE’s focus on integrated networking and hybrid cloud solutions through its GreenLake platform will be the critical differentiator to watch.
Sources
Sources
Based on 2 source articles- marketscreener.comHewlett Packard Enterprise forecasts revenue above estimatesMar 9, 2026
- ChannelnewsasiaHewlett Packard Enterprise projects revenue above estimates on AI boomMar 9, 2026
Cite This Page
"HPE Forecasts Revenue Beat as AI Server Backlog Surpasses $5 Billion." SaaS Intelligence Brief, March 10, 2026. https://getsaasbrief.com/story/hpe-earnings-ai-backlog-growth-2026
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