Hewlett Packard Enterprise Shares Drop 9% as Soft AI Server Outlook Weighs on Guidance

Core Viewpoint - Hewlett Packard Enterprise (HPE) shares fell over 9% intra-day following a weaker-than-expected revenue forecast, attributed to softness in AI server and hybrid cloud businesses as customers delayed orders until the latter half of next year [1] Financial Performance - In the fiscal fourth quarter, HPE reported adjusted earnings of $0.62 per share, slightly above the prior-year period and exceeding its guidance range of $0.56 to $0.60 [2] - Revenue increased by 14% year-over-year to $9.7 billion, but fell short of analyst expectations of $9.9 billion [2] - Server sales decreased by 5% to $4.46 billion, while hybrid cloud revenue declined by 12% to $1.41 billion [2] Business Segments - The AI server business, reliant on advanced Nvidia chips, experienced delays as customers postponed deployments [3] - Networking revenue surged by 150% to $2.8 billion, driven by HPE's recent acquisition of Juniper Networks [3] Future Outlook - For the fiscal first quarter, HPE projected adjusted EPS of $0.57 to $0.61 on revenue of $9.0 billion to $9.4 billion, below Wall Street estimates of $9.91 billion in sales but slightly above expectations for EPS of $0.54 [4] - HPE raised its full-year fiscal 2026 outlook, guiding adjusted diluted EPS between $2.25 and $2.45, and increasing the midpoint of its free cash flow forecast to $1.7 billion to $2.0 billion [4]