Hewlett Packard Enterprise Falls 5% as Supply Constraints Overshadow Raised Guidance, Super Micro Slips, Dell Holds Steady

David Moadel

Thu, September 3, 2026 at 4:52 PM GMT+3 5 min read

Hewlett Packard Enterprise (NYSE:HPE) stock is falling 5% to $27.92 in Thursday trading despite the company delivering a strong fiscal third quarter and raising its outlook for both fiscal 2026 and fiscal 2027. Meanwhile, Super Micro Computer (NASDAQ:SMCI) stock is sliding 1% to $36.64, while Dell Technologies (NYSE:DELL) stock is holding relatively steady at around $492 after Dell's own upbeat AI infrastructure update.

Tommy Lee Walker

HPE's quarterly revenue climbed 34% year over year to $12.2 billion, while adjusted earnings reached $1.11 per share, comfortably above the company's previous outlook. HPE also raised its fiscal 2026 revenue-growth forecast to 34% to 37% from 29% to 33%, yet supply constraints are giving investors a reason to look past the headline numbers.

HPE Has More Demand Than It Can Fulfill

Hewlett Packard Enterprise's Cloud & AI revenue rose 25% to $9 billion, with server revenue climbing 35% to $6.8 billion. Hewlett Packard Enterprise's networking business was even stronger, with revenue jumping 75% to $2.9 billion, but supply limitations prevented HPE from converting more of its demand and orders into near-term revenue.

Hewlett Packard Enterprise is dealing with shortages involving memory, NAND, CPUs and drives, while management indicated that component availability remains a meaningful constraint. HPE's inventory also increased to $11.82 billion from $7.16 billion a year earlier, reflecting efforts to secure supplies while component costs remain elevated.

Dell And Super Micro Provide Useful Context

Dell Technologies offers an interesting comparison because Dell recently reported $60.9 billion of AI server orders in a single quarter and an AI backlog of $95 billion. Dell stock's reaction to those results was initially strong, although the scale of Dell's orders also highlighted how quickly AI infrastructure companies are having to expand their operations to meet customer demand.

Super Micro Computer has a more specialized AI-server exposure and therefore provides another useful reference point for HPE. Super Micro Computer stock is trading near $36.52 Thursday, below its 52-week high of $58.78, illustrating that strong AI infrastructure demand doesn't automatically translate into sustained stock-market momentum.

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Oracle Deal Strengthens The Bull Case

Hewlett Packard Enterprise also expanded its collaboration with Oracle (NYSE:ORCL), which plans to deploy HPE Juniper Networking equipment across its AI data centers. The agreement could provide HPE with a multiyear source of networking demand as Oracle expands infrastructure for artificial intelligence workloads.

Hewlett Packard Enterprise's fiscal 2027 framework adds another bullish element, with management now expecting revenue growth of 13% to 17% and adjusted earnings-per-share growth of 16% to 20%. HPE also expects at least $5 billion of free cash flow in fiscal 2027, suggesting the company sees its AI infrastructure expansion translating into stronger cash generation over time.

Supply Constraints Keep The Risks Elevated

The iShares U.S. Technology ETF (NYSE ARCA:IYW) is up 1% to $250.69 Thursday, making HPE's decline look more company-specific than reflective of a broad technology selloff. That contrast matters because HPE is falling despite strong results and higher guidance, suggesting investors may be more concerned about execution and component availability than about AI infrastructure demand itself.

The bullish case is that HPE's record orders and backlog could support substantial growth once supply becomes easier to secure. The bearish case is that shortages can limit revenue, raise costs and pressure margins, while HPE's stock had already climbed sharply this year before the latest earnings report, leaving investors with elevated expectations.

Hewlett Packard Enterprise has delivered plenty of evidence that AI infrastructure demand remains strong, but the latest reaction shows that demand alone may not be enough to satisfy shareholders. Investors can watch for whether HPE converts its large backlog into revenue more quickly as component availability improves, while also monitoring whether margins hold up as the mix shifts toward AI systems.

HPE stock could recover if supply constraints ease and the company's raised guidance proves achievable, but the near-term setup remains complicated by component shortages and elevated expectations. Investors who want exposure to the AI infrastructure theme should consider keeping their HPE position sizes moderate, particularly while the market is still testing whether strong demand can translate into equally strong shipments and profits.

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