HPE stock soars on record backlog, booming AI server business

June 2, 2026 - 03:18

Shares of Hewlett Packard Enterprise were set to jump sharply at the opening bell on Tuesday following a blockbuster quarterly earnings report. The company, known for its servers and networking gear, posted results that beat Wall Street expectations, driven by a surge in demand for artificial intelligence infrastructure.

HPE reported a record backlog, signaling strong future revenue from AI-related orders. The company's AI server business, in particular, saw explosive growth as enterprises and cloud providers scramble to build out computing power for machine learning and large language models. Executives noted that the demand for high-performance systems, especially those equipped with advanced graphics processors, has not shown signs of slowing.

The strong performance marks a turnaround for HPE, which has been repositioning itself to compete in the high-growth AI market. While traditional server sales have been steady, the AI segment has become the primary engine of revenue expansion. The company also benefited from improved supply chains, allowing it to fulfill more orders than in previous quarters.

Investors cheered the news, pushing the stock higher in pre-market trading. The rally adds to a year of gains for HPE, as the company continues to capitalize on the broader tech industry's pivot toward AI workloads. Analysts have raised their price targets, citing the durability of the AI spending cycle and HPE's ability to secure large contracts.

The company's outlook for the current quarter also came in above expectations, further boosting confidence. With AI infrastructure spending expected to remain strong, HPE appears well positioned to ride the wave of enterprise adoption.