Hewlett Packard Enterprise Tops Q2, Jumps 7% Pre-Market
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Hewlett Packard Enterprise (NYSE:HPE) leaped about 7% premarket after Q2 results topped expectations, prompting Evercore to stick with an Outperform rating and $22 target.
Evercore's Amit Daryanani highlighted solid upside, with Q2 revenue of $7.63 billion and EPS of $0.38 beating consensus of $7.45 billion and $0.33. A smaller-than-expected tariff impact and strong execution contributed roughly $0.05 of the EPS beat.
HPE guided Q3 revenue to $8.35 billion (street: $8.22 billion) and EPS to $0.40$0.45 (street: $0.41), anticipating mid-teens percentage growth in serversfueled by a large AI server orderand sequential gains across all segments. HPE also narrowed its fiscal 2025 guidance ranges.
Evercore notes multiple upcoming catalysts: the HPE Discover event with new product launches, the July 8 DOJ trial concerning the Juniper Networks (JNPR) takeover, and an October 15 analyst day. Even if an activist campaign doesn't materialize, HPE's trajectory looks strong.
Morgan Stanley's (NYSE:MS) Meta Marshall kept an Equal-Weight rating and $22 target, pointing out Q2 top-line strength from AI servers and storage, plus effective cost controls. Margins held up, and tariffs barely dented enterprise demandthough U.S. federal business remains soft due to extra approval requirements. Marshall still sees the Juniper deal as a key stock catalyst once it closes.
Investors should care because HPE's beat shows it can grow AI infrastructure sales and manage costs in a mixed macro; upcoming product rollouts and the Juniper acquisition could drive further upside.
This article first appeared on GuruFocus.