Hewlett Packard Enterprise posted record second-quarter results, prompting the company to accelerate its long-term financial goals by two years, as expansion of AI data centers boosts demand for its servers and networking products.
Shares of the company rose 23 percent in extended trading.
HPE, which competes with Dell and Super Micro Computer, is benefiting as customers increasingly buy server and data center equipment to power AI applications. U.S. tech giants including Alphabet and Amazon plan to spend over $700 billion on AI infrastructure this year, bolstering demand for suppliers like HPE.
That helped HPE raise fiscal 2026 revenue growth outlook to between 29 and 33 percent, up from prior expectations of 17 to 22 percent. It now expects annual networking segment revenue growth of 72 to 75 percent, a sharp increase from 68 to 73 percent.
HPE reported record revenue growth of 40 percent to $10.68 billion, beating analysts' average estimate of $9.79 billion. Adjusted earnings per share of 79 cents topped expectations of 53 cents.
CFO Marie Myers said the key difference this quarter was enterprises significantly adopting agentic AI as a core workload.
The company raised annual adjusted EPS to between $3.35 and $3.45, compared with an earlier projection of $2.30 to $2.50. It had anticipated adjusted EPS of at least $3.00 for fiscal 2028.
CEO Antonio Neri said customers continue to invest in modernizing infrastructure and scaling AI.
HPE also introduced a fiscal 2027 growth framework, expecting revenue growth of 8 to 12 percent, adjusted EPS growth of 12 to 16 percent, and free cash flow of at least $4.5 billion.