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(NYSE:HPE) – Hewlett Packard Q2 Earnings Sends Stock Price Higher, Beat & Raise

Analyst Team trader
Updated 5 Jun 2024

Hewlett Packard Enterprise (NYSE:HPE) announced its second-quarter earnings after the bell last night, sending the stock price soaring, up almost 15% in premarket trading this morning.

Wall Street set expectations at 39 cents in EPS and $6.83 billion in revenue, and both were comfortably surpassed. In the wake of a steady YTD stock performance—with an increase of 3.9%% since the start of the year, the bullish numbers have improved the sentiment, as HPE continues to expand its foothold in AI and networking. This was mentioned quite a bit as you might imagine with the strong sentiment around AI stocks.

“AI systems revenue more than doubled from the prior quarter, driven by our strong order book and better conversion from our supply chain,”

“Our deep expertise in designing, manufacturing, and running AI systems at scale fueled growth of cumulative AI systems orders to $4.6 billion, with enterprise AI orders representing more than 15%”

Antonio Neri, HPE CEO

Here were the headlines from the report:

  • EPS of $0.42 – Beat $0.39 consensus expectation
  • Revenue of $7.20bn – Beat $6.83 billion expected
  • Q3 outlook of $7.4 billion to $7.8 billion – Raise from expected $7.46bn
  • FY 2024 EPS outlook of $1.85 – $1.95 – Midpoint above expected $1.88

Investors were watching closely as HPE's strategic initiatives to tackle the burgeoning demand for artificial intelligence technologies set the stage for future growth. The company's voice in the AI arena is amplified with its latest acquisition of Juniper Networks and the subsequent emphasis on AI-optimized servers and high-margin offerings. This focus is well-timed, given the current market demand for advanced technology solutions that can process, store, and interpret vast amounts of data with speed and efficiency.

The corporate vision for expansion does not stop at AI. Hewlett Packard recently introduced the HPE Aruba Networking Enterprise Private 5G, positioning the company as a key player in the burgeoning private cellular network market. This move diversifies their product offerings, potentially opening new revenue streams and bolstering their networking capabilities.

On the financial markets side, analysis of Hewlett Packard's stock reveals a consensus rating of Neutral with a price target of $15.83—but recent assessments from Wells Fargo, Morgan Stanley, and Stifel indicate an implied 3.88% upside, with an average target price of $18.67.

Barclays analysts came out this morning with an upgrade on the stock, increasing their price target to $20 (up from $14). The firm remain ‘Neutral' on the HPE, and are now in line with the current share price, considering the uplift seen in the premarket session.

HPE's evolution is closely observed by industry experts, as is its success in integrating the newly acquired resources from Juniper Networks into its range of solutions. The company's ability to deliver on its AI and networking promises may well dictate the direction and sentiment of stock movement in the days following the earnings report.

The earnings call is not just a confirmation of Hewlett Packard's recent successes but also offers some insights into the company's roadmap for the future—in an era increasingly shaped by AI and sophisticated networking solutions.

The AskTraders Analyst Team features experts in technical and fundamental analysis, as well as traders specializing in stocks, forex, and cryptocurrency.