Hewlett Packard Enterprise Shares Fall After Weak Revenue Forecast

Hewlett Packard Enterprise (HPE) shares fell by 5 percent in after-hours trading on Thursday after the company issued a weaker-than-expected revenue forecast for the first quarter of fiscal 2026. The projection reflects cautious enterprise spending amid persistent economic uncertainty and elevated interest rates.

The technology firm, which specializes in enterprise servers, storage, and networking solutions, expects revenue in the range of $9 billion to $9.4 billion. This falls short of analysts’ average estimate of $9.90 billion, based on data compiled by LSEG.

Enterprises continue to pursue cost-optimization strategies in light of macroeconomic headwinds. Although companies are making sizable investments in artificial intelligence infrastructure, many are also seeking to reduce expenditures on traditional hardware. This balancing act is pressuring vendors like Hewlett Packard Enterprise and competitors including Dell Technologies and Super Micro Computer.

For the fiscal quarter ending October 31, HPE reported total revenue of $9.68 billion, below Wall Street expectations of $9.94 billion. Server revenue declined 5 percent year-on-year to $4.5 billion, while revenue from the hybrid cloud segment dropped 12 percent to $1.41 billion.

Analysts expect continued challenges in the compute, networking, and storage markets through early 2026. Heightened competition across the sector, especially from other server providers, is also weighing on HPE’s growth prospects.

Despite the shortfall, HPE raised its full-year adjusted earnings forecast. The company now anticipates earnings per share for fiscal 2026 to fall between $2.25 and $2.45, up slightly from its previous range of $2.20 to $2.40.

The updated guidance suggests a degree of long-term confidence, although the near-term outlook remains clouded by slowing enterprise hardware investment and competitive pricing pressures.