Hewlett Packard Enterprise Stock: Is HPE Underperforming the Technology Sector?

With a market cap of $21.1 billion, Hewlett Packard Enterprise Company (HPE) is a global edge-to-cloud company that provides innovative solutions enabling customers to capture, analyze, and act on data seamlessly across regions. Based in Spring, Texas, HPE serves commercial and large enterprise clients as well as public sector organizations through an extensive global partner ecosystem.

Companies valued at $10 billion or more are generally classified as “large-cap” stocks, and Hewlett Packard fits this criterion perfectly. Operating through five key segments - Server; Hybrid Cloud; Intelligent Edge; Financial Services; and Corporate Investments, it offers a wide range of products and services, including servers, networking, storage, and cloud solutions delivered through its HPE GreenLake platform. 

However, the information technology products and services provider has dipped 34.9% from its 52-week high of $24.66. Over the past three months, shares of HPE have declined 25.7%, which lags behind the Technology Select Sector SPDR Fund's (XLK) dip of 9.3% during the same period.

In the longer term, Hewlett Packard has dropped 24.8% on a YTD basis, underperforming XLK’s nearly 8% decline. Moreover, shares of HPE have decreased 6.7% over the past 52 weeks, compared to XLK’s nearly 2% gain over the same time frame.

Recently, HPE stock has fallen below its 50-day and 200-day moving averages. 

Despite exceeding Q1 2025 revenue expectations with $7.9 billion on Mar. 6, HPE shares fell over 11% after reporting adjusted EPS of $0.49, missing analyst estimates. Non-GAAP gross margin dropped sharply to 29.4%, reflecting pricing pressures, rising AI infrastructure costs, and leading to a steep free cash flow loss of $877 million. Investor sentiment worsened after HPE’s Q2 guidance forecasted revenue between $7.2 billion and $7.6 billion and adjusted EPS of up to $0.34, well below analyst expectations.

Additionally, full-year adjusted EPS guidance capped at $1.90 fell short of the Street’s estimate, while legal uncertainty around the Juniper Networks acquisition added further risk.

In comparison with its rival, Cisco Systems, Inc. (CSCO) has outperformed HPE, with a 20.9% increase over the past 52 weeks and a rise of 1.9% on a YTD basis.

Despite HPE’s weak performance, analysts are moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 15 analysts covering the stock, and it is currently trading below the mean price target of $19.86.