GoKawiilHewlett Packard Enterprise rings the Opening Bell at the New York Stock Exchange on Oct. 15, 2025.
Shares of Hewlett Packard Enterprise surged 25% Tuesday, pacing for its biggest daily gain ever as the company posted its biggest earnings beat since 2018.
The stock is looking to set a new intraday all-time high.
Artificial intelligence-related demand in its server unit blew away analysts' expectations for second-quarter earnings. HPE reported adjusted earnings per share of 79 cents, versus 53 cents expected, and overall revenue soared to $10.68 billion versus an expected $9.79 billion.
Server revenue alone, a sub-division of its cloud and AI unit, came in at $5.45 billion, topping the $4.66 billion analysts expected.
Tune in at 11:00 a.m. ET as HPE CEO Antonio Neri joins CNBC TV. Watch in real time on CNBC+ or the CNBC Pro stream.
CEO Antonio Neri called that unit's revenue growth "exceptional," and told analysts on Monday's earnings call that agentic AI has been a "key driver of demand acceleration."
"Traditional sever orders increased triple digits, as customers continue to modernize their compute infrastructure and invest in AI inferencing," Neri said.
In the wake of Dell's own AI-fueled earnings blowout, some analysts are getting cautious about how sustainable demand might be in the server space, as firms continue to buy and server prices climb.
Bernstein increased their HPE estimates after better projections in the traditional server unit and took their price target to $62 from $35, writing that "a lot of the upside is already in the stock." The firm kept its rating at Market Perform. Morgan Stanley took their price target from $33 to $71.
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