Hewlett Packard Enterprise (NYSE:HPE) shares fell more than 8% Thursday morning after the company’s investor day in New York revealed fiscal 2026 guidance that came in below expectations. Despite the near-term caution, analysts signaled confidence in HPE’s long-term growth story, particularly in networking, cloud, and AI.
Barclays said the company’s fiscal 2026 outlook “underwhelmed for the business,” attributing it largely to management conservatism and difficult year-over-year comparisons. The firm noted expectations for networking growth in the low- to mid-single digits and cloud and AI growth in the mid-single to low double digits, translating to total revenue growth of 5–10%.
Barclays also pointed out that margins remain under pressure from the AI server segment but said management “continues to see legs in the top-line story, particularly with a sovereign and enterprise focus.”
HPE expects networking revenue to rise 5–7% annually from fiscal 2025 to 2028 and cloud and AI to grow 4–8% annually. The company guided to networking margins of 25–28% and cloud and AI margins of 8–10% by fiscal 2028, with EPS projected to reach at least $3 by that year.
Morgan Stanley characterized the event as “down, but not out,” acknowledging that fiscal 2026 EPS guidance fell short of consensus estimates but emphasizing that the long-term framework remains intact if execution stays consistent.
The firm reiterated its Overweight thesis, pointing to expected EPS of $3 or more by FY28, supported by stronger networking contributions and higher free cash flow conversion. Morgan Stanley also backed HPE’s focus on de-leveraging over buybacks, highlighting networking and AI as key growth engines driven by enterprise and sovereign demand.
Hewlett Packard Enterprise stock price
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