HPE just had its biggest earnings beat in years — ride the AI server momentum
Hewlett Packard Enterprise just reported its biggest earnings beat since 2018, sending the stock up 30%. The company's AI server business and networking division (which grew revenue 148%) are booming, and its order backlog hit a record high.
Idea
HPE's 30% earnings pop isn't just a one-day story. The company reported 148% growth in networking revenue and a record backlog of orders, meaning they've already locked in future sales. They're becoming a core picks-and-shovels play in the AI infrastructure buildout — they sell the servers and networking gear that companies need to run AI. With Anthropic, OpenAI, and SpaceX all heading toward blockbuster IPOs, investor appetite for AI-adjacent companies is intense. The combination of strong fundamentals and a favorable market backdrop suggests this move has room to run beyond the initial gap.