HP Enterprise Crushes Q3 Estimates as Cloud & AI Growth Soars
HP Enterprise's fiscal third-quarter results exceeded expectations, driven by higher-than-expected Cloud & AI revenue and better Cloud & AI EBIT margins. The company reported earnings of $1.11 per share for the quarter, beating both Goldman Sachs and FactSet consensus estimates.
The beat was accompanied by record order growth of 42% year-over-year in the quarter, with Server revenue rising 35% year-over-year. Networking orders grew 36% year-over-year, with campus and branch refresh up in the low teens and data center switching and routing up in the high double digits.
HP Enterprise raised its fiscal 2027 outlook, projecting overall revenue growth of 13% to 17%, up from a prior range of 8% to 12%. The company increased its operating margin guidance to 14% to 15% from 12% to 16% previously, and raised non-GAAP earnings per share growth expectations to 16% to 20% from 12% to 16%. Free cash flow guidance was lifted to at least $5 billion from at least $4.5 billion.
Raymond James raised its price target for HP Enterprise to $86 from $74, maintaining an Outperform rating. Deutsche Bank also raised its price target to $68 from $62, maintaining a Buy rating due to record AI demand and orders.