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Should You Buy, Sell or Hold HPE Stock at a P/E Multiple of 10.08X?
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Key Takeaways
HPE trades at 10.08X forward earnings, below the sector's 16.76X, with a Value Score of A.
HPE's Cloud & AI revenues rose 25.4% to $9.04 billion, while Networking revenues reached $2.89 billion.
HPE's integrated AI portfolio and GreenLake adoption support growth as fiscal 2026 margin estimates rise.
Hewlett Packard Enterprise (HPE - Free Report) trades at a forward price-to-earnings (P/E) multiple of 10.08X, below the Zacks Computer and Technology sector’s P/E of 16.76X. The discounted valuation of HPE stock is further substantiated by the Zacks Value Score of A.
HPE Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
The discounted valuation remains despite HPE stock climbing 98% year to date, outperforming the broader sector and the Zacks Computer - Integrated Systems industry’s return of 65.2% and 4.1%, respectively.
HPE YTD Performance Chart
Image Source: Zacks Investment Research
HPE Experiences Growth Across Cloud and Networking
Hewlett Packard Enterprise operates across three primary business segments, namely Cloud & AI, Networking, and Corporate Investments and Other, serving enterprise customers with infrastructure, software, services and flexible consumption solutions. Cloud & AI combines HPE’s server, storage and financial services businesses.
HPE’s server portfolio includes general-purpose and workload-optimized systems, high-performance computing, supercomputing, AI infrastructure, data analytics and transaction processing. Its storage offerings include HPE Alletra, unstructured data solutions, data protection, GreenLake Flex and related software. The segment is benefiting from growing demand for AI-ready servers and enterprise infrastructure. In the third quarter of fiscal 2026, Cloud & AI generated $9.04 billion in revenues, up 25.4% year over year.
HPE’s networking develops and sells network and security products and services across campus, branch, data center, routing and security markets. Its portfolio includes wireless access points, switches, routers, gateways, network-management software, support and professional services. The acquisition of Juniper Networks has expanded HPE’s networking capabilities and exposure to AI data center infrastructure. HPE’s networking revenues reached $2.89 billion in the third quarter of fiscal 2026, rising 10% on a normalized basis.
Corporate Investments and Other includes Advisory and Professional Services, Telco, Instant On and Hewlett Packard Labs. These activities complement HPE’s broader technology portfolio through consulting, specialized connectivity offerings and research. Across these businesses, HPE is also expanding GreenLake, its consumption-based hybrid cloud platform, connecting infrastructure, software and services. Together, its three segments position HPE to address demand for AI infrastructure, modern networking and hybrid cloud environments.
HPE Wins Against Competitors With Diverse Portfolio
HPE competes with Super Micro Computer (SMCI - Free Report) , Dell Technologies (DELL - Free Report) and Cisco (CSCO - Free Report) in the AI infrastructure market. However, HPE’s ability to package compute, storage, networking and services into pre-configured solutions can reduce deployment complexity for enterprises and sovereign customers while giving it an edge over its competitors. Super Micro Computer is on track to scale rack production capacity to more than 6,000 AI racks per month by the end of fiscal 2026, including 3,000 direct liquid cooling racks monthly.
Super Micro Computer is already shipping 150kW AI racks in volume and preparing 250kW and 500kW rack solutions to support future high-density AI training and inference workloads. Dell Technologies is a major supplier of servers and storage systems, with a broad customer base across enterprises and cloud providers. Its scale, established distribution and service offerings give it an edge in winning large contracts.
Cisco has also taken $5.3 billion of hyperscaler AI infrastructure orders in fiscal 2026 and raised its full-year order outlook to $9 billion from $5 billion. However, HPE’s ability to package compute, storage, networking and services into pre-configured solutions can reduce deployment complexity for enterprises and sovereign customers. This gives HPE an edge over its competitors.
HPE is also able to keep its margin stable. The Zacks Consensus Estimate for HPE’s fiscal 2026 margin reflects year-over-year growth of 97%. Estimates have been revised upward over the past 30 days.
Image Source: Zacks Investment Research
Conclusion: Buy HPE Stock Now
Hewlett Packard Enterprise’s strong AI infrastructure momentum, expanding AI backlog, growing GreenLake adoption and integrated portfolio support its growth outlook. Despite a sharp share price rally, HPE’s valuation remains attractive relative to industry peers. Given these factors, it’s prudent to accumulate this Zacks Rank #2 (Buy) stock at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
View the Zacks #1 Rank List
Image: Bigstock
Should You Buy, Sell or Hold HPE Stock at a P/E Multiple of 10.08X?
Key Takeaways
Hewlett Packard Enterprise (HPE - Free Report) trades at a forward price-to-earnings (P/E) multiple of 10.08X, below the Zacks Computer and Technology sector’s P/E of 16.76X. The discounted valuation of HPE stock is further substantiated by the Zacks Value Score of A.
HPE Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
The discounted valuation remains despite HPE stock climbing 98% year to date, outperforming the broader sector and the Zacks Computer - Integrated Systems industry’s return of 65.2% and 4.1%, respectively.
HPE YTD Performance Chart
Image Source: Zacks Investment Research
HPE Experiences Growth Across Cloud and Networking
Hewlett Packard Enterprise operates across three primary business segments, namely Cloud & AI, Networking, and Corporate Investments and Other, serving enterprise customers with infrastructure, software, services and flexible consumption solutions. Cloud & AI combines HPE’s server, storage and financial services businesses.
HPE’s server portfolio includes general-purpose and workload-optimized systems, high-performance computing, supercomputing, AI infrastructure, data analytics and transaction processing. Its storage offerings include HPE Alletra, unstructured data solutions, data protection, GreenLake Flex and related software. The segment is benefiting from growing demand for AI-ready servers and enterprise infrastructure. In the third quarter of fiscal 2026, Cloud & AI generated $9.04 billion in revenues, up 25.4% year over year.
HPE’s networking develops and sells network and security products and services across campus, branch, data center, routing and security markets. Its portfolio includes wireless access points, switches, routers, gateways, network-management software, support and professional services. The acquisition of Juniper Networks has expanded HPE’s networking capabilities and exposure to AI data center infrastructure. HPE’s networking revenues reached $2.89 billion in the third quarter of fiscal 2026, rising 10% on a normalized basis.
Corporate Investments and Other includes Advisory and Professional Services, Telco, Instant On and Hewlett Packard Labs. These activities complement HPE’s broader technology portfolio through consulting, specialized connectivity offerings and research. Across these businesses, HPE is also expanding GreenLake, its consumption-based hybrid cloud platform, connecting infrastructure, software and services. Together, its three segments position HPE to address demand for AI infrastructure, modern networking and hybrid cloud environments.
HPE Wins Against Competitors With Diverse Portfolio
HPE competes with Super Micro Computer (SMCI - Free Report) , Dell Technologies (DELL - Free Report) and Cisco (CSCO - Free Report) in the AI infrastructure market. However, HPE’s ability to package compute, storage, networking and services into pre-configured solutions can reduce deployment complexity for enterprises and sovereign customers while giving it an edge over its competitors. Super Micro Computer is on track to scale rack production capacity to more than 6,000 AI racks per month by the end of fiscal 2026, including 3,000 direct liquid cooling racks monthly.
Super Micro Computer is already shipping 150kW AI racks in volume and preparing 250kW and 500kW rack solutions to support future high-density AI training and inference workloads. Dell Technologies is a major supplier of servers and storage systems, with a broad customer base across enterprises and cloud providers. Its scale, established distribution and service offerings give it an edge in winning large contracts.
Cisco has also taken $5.3 billion of hyperscaler AI infrastructure orders in fiscal 2026 and raised its full-year order outlook to $9 billion from $5 billion. However, HPE’s ability to package compute, storage, networking and services into pre-configured solutions can reduce deployment complexity for enterprises and sovereign customers. This gives HPE an edge over its competitors.
HPE is also able to keep its margin stable. The Zacks Consensus Estimate for HPE’s fiscal 2026 margin reflects year-over-year growth of 97%. Estimates have been revised upward over the past 30 days.
Image Source: Zacks Investment Research
Conclusion: Buy HPE Stock Now
Hewlett Packard Enterprise’s strong AI infrastructure momentum, expanding AI backlog, growing GreenLake adoption and integrated portfolio support its growth outlook. Despite a sharp share price rally, HPE’s valuation remains attractive relative to industry peers. Given these factors, it’s prudent to accumulate this Zacks Rank #2 (Buy) stock at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.