Early Bird Prime for October 4, 2026

Hewlett Packard Enterprise $HPE ( ▲ 7.36% ) is up a staggering 186.84% in 2026, and it just hit an all-time high. This past week, HPE hosted an exciting investor day. They announced a jaw-dropping $1.2 billion order from Vultr and raised their fiscal 2027 networking revenue growth outlook to the high teens to low twenties.

After the investor day, a Citi analyst was so impressed that they raised their price target on HPE to $92 from $76. Clearly, they see something special in the company.

But with the stock up so much recently, can this rally really continue? HPE has appreciated about 159% over the past 12 months, leaving the S&P 500 in the dust with its measly 14.4% return. There’s a risk that all the AI, Juniper, and raised-guidance optimism is already baked into the stock price.

One central issue is revenue quality. Sure, AI systems can generate large-dollar sales, but they typically have lower gross margins than HPE’s networking and software-rich businesses. Management has even said they expect gross margin to moderate toward more historical levels as AI systems become a larger part of revenue. So, while revenue and backlog could remain strong, profit margins could potentially disappoint investors who were hoping for a networking miracle.

Should you buy HPE’s stock right now in 2026 or avoid it? Here’s the answer…