Shares of Hewlett Packard Enterprise (HPE) traded lower by approximately 1.6% to $25.38 in late-morning activity on Thursday, March 26, 2026. The modest pullback followed two consecutive sessions of significant gains earlier in the week, which had propelled the stock to its highest levels in recent trading.
Analyst Optimism Drives Momentum
Driving the recent upward momentum, analysts at Evercore ISI raised their price target on HPE to $30, up from a previous target of $28. The firm maintained its Outperform rating on the stock. In its research note, Evercore pointed to stronger-than-anticipated demand for servers powered by central processing units (CPUs) as a key catalyst. Analyst Amit Daryanani noted that CPUs, which manage data and work in tandem with graphics chips in artificial intelligence systems, are becoming a more significant component of the broader AI infrastructure build-out.
Substantial AI Backlog and Financial Outlook
The company's artificial intelligence business remains a central focus for investors. HPE recently disclosed that its AI-related order backlog—representing committed sales not yet recognized as revenue—has swelled to over $5 billion. This figure underscores the strong demand for the company's AI-optimized servers and networking solutions. Earlier in March, HPE provided a second-quarter revenue outlook ranging between $9.6 billion and $10.0 billion, surpassing analyst expectations. The company also raised its adjusted earnings forecast for the full 2026 fiscal year.
CEO Antonio Neri recently stated that demand is growing at a double-digit percentage rate year-over-year across all business segments. This commentary has bolstered the view that HPE's networking and AI-server divisions are well-positioned to capture the next wave of corporate technology spending.
Market Context and Competitive Landscape
The shift in investor sentiment extends beyond chip manufacturers to companies providing the essential server and networking hardware that supports AI workloads. HPE, along with peers like Dell Technologies and Super Micro Computer, has benefited from this trend as Wall Street reassesses the potential demand for CPUs and supporting infrastructure. Daryanani also observed that some investors are viewing Dell, and to a lesser extent HPE, as potential beneficiaries if Nvidia were to adjust its supply chain following recent regulatory news involving Super Micro.
Thursday's dip in HPE shares occurred against a backdrop of broader market weakness, where major indices declined amid renewed geopolitical concerns in the Middle East and their potential impact on economic growth. Technology stocks were among the hardest hit during the session, though HPE's decline was relatively muted compared to the sector's overall sell-off.
Legal Victory and Integration Challenges
In a separate development, HPE secured a favorable legal ruling on Tuesday in the long-running Autonomy case. A London judge denied permission for an appeal from the estate of former Autonomy CEO Mike Lynch, upholding a prior judgment. HPE estimates the total damages and interest owed at roughly $1.24 billion. The estate retains the option to apply directly to the Court of Appeal.
Despite the positive momentum, challenges remain. The company recently indicated a strategic shift toward prioritizing higher-margin product orders, a move that CFO Marie Myers acknowledged could temporarily slow the growth rate of AI systems revenue. Furthermore, HPE's pending $14 billion acquisition of Juniper Networks faces some regulatory scrutiny, with reports indicating tepid interest in certain assets HPE agreed to divest as part of the deal.
Investors continue to show strong interest in the AI infrastructure theme, channeling funds into companies that manufacture servers, networking gear, and related hardware. While HPE shares cooled on Thursday, the stock, alongside its peers, remains squarely in the market's spotlight as enterprise spending on AI accelerates.
