Loop Capital upgrades HPE to Buy, sees 30% upside

Loop Capital raised its rating on Hewlett Packard Enterprise to Buy and increased the price target to $75 on Tuesday after HPE reported a record second quarter. The firm said the quarter was driven by growing demand for AI inference servers and a large gain in networking revenue related to the Juniper Networks acquisition.

Analyst Ananda Baruah described the April quarter as a ‘‘historic blowout’’ and cited rising adoption of agentic systems and inference workloads that boosted both revenue and operating margins. Loop Capital said commercial spending on inference is still in early stages, which could support multiple years of elevated growth for HPE’s server business.

The research note pointed to HPE’s updated fiscal 2026 guidance, which projects revenue to increase at least 29%, and highlighted a reported 72% rise in networking revenue. Loop Capital said combining Juniper’s networking and Mist AI with HPE hardware should expand HPE’s addressable market in hybrid cloud and edge computing and create recurring software-as-a-service revenue streams.

HPE shares rose more than 25% in early trading on the day of the upgrade and were trading well above key moving averages. Shares have nearly tripled from a year-to-date low in late February. Technical indicators cited by Loop Capital included a relative strength index in the early 90s and a 0.97% dividend yield.

On valuation, Loop Capital noted HPE trades near 22 times forward earnings, compared with about 35 times for peer Dell. Wall Street’s consensus at the time of the note was a moderate buy.

“If the current networking explosion transforms into a durable multi-year architecture overhaul rather than a cyclical surge, out-year estimates will see continued upward revisions,” Baruah wrote.

Loop Capital said that if networking demand proves durable, analysts may raise estimates for periods beyond the current fiscal year, driven by higher server demand and integration gains from Juniper.