What Was HPE Telling You Before Its Stock Ran?
Hewlett Packard Enterprise (HPE) stock returned 187.1%, counting dividends, in the twelve months to October 13, 2026. On September 2, 2026, the company reported record quarterly revenue, orders, and backlog. Executives credited demand for traditional servers, AI systems and networking, along with higher prices for those servers. Did the company say anything about that demand, or those server prices, before October 2025?
HPE Praised AI Demand, Then Faulted Its Own Pricing
Executives addressed these trends twice, though only one instance sounded like good news at the time. During the December 5, 2024 call for fiscal Q4 2024, management noted that demand for AI systems remained strong. Revenue for that quarter reached a record $8.5 billion, up 15.1% from a year earlier.
Three months later, during the March 6, 2025 call for fiscal Q1 2025, executives identified servers as a problem. Management stated that HPE had priced its traditional servers without fully accounting for the value of its inventory, and that unusually high AI inventory had squeezed server margins further. Server operating margin stood at 8.1%, a figure management called well below expectations. The shares struggled after that report. Only in hindsight does this look like a sign, because server pricing is exactly what management would highlight eighteen months later.
Financial filings from HPE showed this same mix of rising sales and weaker margins. Revenue grew 18.5% from a year earlier in fiscal Q3 2025. Yet operating margin for that quarter fell to 4.7%, down from 7.8% a year earlier. The stock was already rising as well: it returned 74.7% in the six months before the twelve-month window began on October 10, 2025.
How Big Was HPE’s Run Against The S&P 500?
The S&P 500 returned about 18% over the same twelve months. That means HPE returned roughly ten times as much as the broader index. Almost all of that gain materialized in the last six months, when the stock returned 183%. HPE was not alone in this trend: Dell Technologies, one of its peers, did even better at 285.0%. Not every peer joined in, though, as IBM fell 14.8%.
The shift linking back to those earlier earnings calls occurred in servers, HPE’s largest business at 52% of fiscal 2025 revenue. Server revenue rose 35% to an all-time high in fiscal Q3 2026. Executives noted that higher average selling prices for traditional servers made up for supply limits on how many units HPE could ship. This trajectory looks like the March 2025 pricing problem reversed.
AI systems, the business management highlighted in December 2024, brought in almost $1.6 billion of the quarter’s $12.2 billion revenue. That remains a small part of HPE’s overall sales.
Are HPE’s Orders And Prices Still Rising?
Orders continue to rise. Management reported that orders grew 42% from a year earlier in fiscal Q3 2026, counting Juniper Networks, now part of HPE, in both years. The company booked more orders that quarter than in any prior quarter, leaving it with a record backlog.
Prices are another matter. Management expects gross margin to move back toward historical levels as more AI systems ship and the traditional server business normalizes. The demand side is still building, while management itself expects the stronger server pricing to ease.
The key metric to watch in the fiscal Q4 2026 report is HPE’s adjusted gross margin, which hit a record 40% in fiscal Q3 2026. A margin holding near 40% would indicate that the server pricing remains in place. Conversely, a move back toward historical levels would fit with pricing easing, though more AI systems shipping would also pull the margin lower.
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