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Hewlett Packard Enterprise (HPE) is finally getting accepted as an AI infrastructure play like rival Dell (DELL).

The analysis: A few days removed from Dell’s stock exploding 32.6% following a monster quarter and guidance, Hewlett Packard Enterprise is experiencing the same market reaction.

Hewlett Packard Enterprise stock rose nearly 20% on Tuesday following much better-than-expected results and upbeat guidance amid the AI infrastructure boom.

Revenue grew 40% year over year to $10.7 billion. Non-GAAP EPS of $0.79 left consensus estimates of $0.53 in the dust.

The engine under the hood here is an insatiable enterprise hunger for raw computational firepower, highlighted by a staggering $1.8 billion in fresh AI systems orders that pushed the company’s total AI backlog to $5.9 billion.

Hewlett Packard Enterprise aggressively jacked up its full-year non-GAAP EPS guidance to a range of $3.35 to $3.45, representing a $1 per share increase from prior targets. It introduced a blistering fiscal 2027 framework that puts the company two full years ahead of its long-term financial plan.

For fiscal 2027, Hewlett Packard Enterprise said it expects revenue growth of 8% to 12%.

Wall Street chatter: Sell-side analysts are tripping over themselves today to offer up praise for Hewlett Packard Enterprise.

Here’s some commentary that caught our attention:

Citi’s Asiya Merchant: “We remain constructive on HPE shares given positive AI compute demand indicators, continued networking momentum, and continued traction in their storage IP Portfolio. Raise estimates and update target price to $70 ($39 prior).”

Loop Capital’s Ananda Baruah: “Upgrading to a Buy and raising our price target to $75 (from $23) as Apr quarter was a historic blowout quarter as agentic and inferencing adoption is triggering not only amplified revenue growth but operating expansion as well. Now that commercial inference investment has begun in earnest (see Dell (DELL) and NetApp (NTAP) as well) we believe we could be at the front end of a 3-5 year growth expansion.”

KeyBanc’s Brandon Nispel: “Results were better than expected, particularly on cloud and AI as traditional server strength was evident while networking was more in line. Looking forward, the demand backdrop gave the company confidence to raise FY26 guidance and guide to FY27. HPE appears to be benefitting from an inflection of enterprise based inference demand where the limited factor appears to be supply.”

AlphaSpace intel: The sudden stock explosion is partially a byproduct of Hewlett Packard Enterprise’s low valuation. Yahoo Finance AlphaSpace data shows the stock has traded on a low single-digit P/E ratio dating back to 2018.

Bottom line: Hewlett Packard Enterprise is deservedly getting a lot of love today as it’s finally accepted into the AI stock club. However, it has to keep earning the ticket to stay in this club, just like rival Dell has done for more than a year.

If not, the stay could prove short — ditto the stock’s gains.

Brian Sozzi is Yahoo Finance's Executive Editor and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.

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