JPMorgan just raised its price target on Hewlett Packard Enterprise (NYSE:HPE | HPE Price Prediction) to $37 from $27, maintaining an Overweight rating. The firm tied the call to a reversal of memory-related concerns that has powered the recent rally in the IT hardware group. For prudent investors, the price target raise signals that Wall Street sees more room to run as margin headwinds fade ahead of earnings season.
JPMorgan also paired the action with a similar move on Dell Technologies (NYSE:DELL), lifting that target to $280 from $205, framing the entire IT hardware group as a synchronized opportunity.
| Ticker | Company | Firm | Action | Old Rating | New Rating | Old Target | New Target |
|---|---|---|---|---|---|---|---|
| HPE | Hewlett Packard Enterprise | JPMorgan | Price Target Raise | Overweight | Overweight | $27 | $37 |
The Analyst’s Case
JPMorgan is most positive on Dell Technologies and Hewlett Packard Enterprise heading into upcoming earnings prints, expecting earnings estimate increases to reinforce medium-term earnings growth outlooks. The firm sees shares returning to valuation multiples “more appropriate for the medium-term earnings growth outlook.”
The core thesis: earlier worries that rising DRAM and NAND prices would compress server gross margins have eased as supply caught up with demand. Micron Technology (NASDAQ:MU) recently posted Q1 FY2026 revenue of $13.64 billion, up 57% year over year, validating that supply is rebalancing rather than choking off downstream margins.
Company Snapshot
HPE’s Q1 FY2026 print already showed the operating leverage. Revenue hit $9.30 billion, up 18% year over year, with non-GAAP EPS of $0.65, beating guidance of $0.57 to $0.61. The Networking segment, lifted by the Juniper Networks integration, surged 152% year over year to $2.71 billion.
CEO Antonio Neri stated that HPE delivered “one of our most profitable quarters on record” with orders increasing double digits year over year across all segments. Management raised FY2026 guidance to 17% to 22% revenue growth and free cash flow of at least $2 billion.
Why the Move Matters Now
HPE stock has been a strong performer in 2026, up 43% year to date through May 14, with the one-month gain at 39%. Shares trade with a forward P/E ratio of 13x, which JPMorgan argues understates the medium-term earnings trajectory.
The Juniper Networks acquisition is the swing factor. The deal validates the networking consolidation thesis and is already driving data center networking growth of 383% year over year. Integration risk remains real, however, and the networking operating margin contracted 600 basis points year over year despite the revenue surge.
What It Means for Your Portfolio
The bull case rests on continued AI server demand, Juniper synergies, and memory cost stabilization. The bear case includes integration execution, competition from Dell and Cisco, and the cyclical nature of IT hardware. The one-year gain of 96% means much of the recovery is already priced in.
For prudent investors, HPE stock offers a credible way to play the memory reversal and AI infrastructure cycle through a steadier name than higher-beta peers. Moderate position sizing makes sense given the run, with the upcoming earnings print serving as the next real test of JPMorgan’s thesis.
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