HPE Stock Surges on Record Backlog, AI Server Demand

Hewlett Packard Enterprise (HPE) shares were set to open more than 25% higher on Tuesday after the company reported record quarterly earnings, driven by surging corporate investment in artificial intelligence infrastructure. Revenue for the fiscal second quarter ended May 31 reached $10.7 billion, up 40% year-over-year, while adjusted earnings per share of $0.79 more than doubled. CEO Antonio Neri said on Monday's earnings call that traditional server orders more than doubled, creating a record company backlog. "Traditional server orders increased triple digits as customers continue to modernize their compute infrastructure and invest in AI inferencing," Neri added, noting that the demand is genuine without cancellations. The Houston-based company raised its full-year outlook and accelerated long-term financial targets by two years, forecasting strong server demand through 2027. HPE has surged over 90% year-to-date, with Vanda Research reporting that retail investors bought as much HPE stock in the two sessions leading up to the release as they did in the prior 11 months combined.