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HPE vs. SMCI: Which AI Infrastructure Stock Has More Upside Now?
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Key Takeaways
SMCI's Q1 FY27 revenues surged 298% to $19.9 billion, with AI solutions contributing 71% of sales.
HPE's AI backlog reached $6.8 billion, while GreenLake customers grew 18% year over year to 52,000.
SMCI offers stronger growth prospects while HPE benefits from a diversified portfolio.
Super Micro Computer (SMCI - Free Report) and Hewlett Packard Enterprise (HPE - Free Report) are capitalizing on rising investments in AI infrastructure, offering high-performance server solutions designed to support increasingly demanding workloads.
However, their product portfolios, business models and growth strategies differ, shaping their competitive positioning. As enterprises and hyperscalers ramp up AI spending, which of the two stocks offers a more compelling investment opportunity?
Let's closely examine the fundamentals of the two companies, so investors can make an informed bet.
The Case for SMCI Stock
Super Micro Computer offers a broad portfolio of rack-scale Total IT Solutions, including complete servers, storage systems, blade servers, subsystems and server management software. Its platforms serve hyperscale cloud providers, enterprises and embedded edge applications. The company is increasingly focused on AI infrastructure, with systems based on NVIDIA and AMD accelerators, modular data center building block solutions and liquid-cooling technologies for high-density deployments.
Super Micro Computer’s exposure to AI infrastructure remains a central growth driver as its first-quarter fiscal 2027 sales reached $19.9 billion, up 298% year over year and 79% sequentially. SMCI’s AI solutions generated about 71% of quarterly revenue versus 59% in the prior quarter. Management expects AI-related solutions to account for 70% to 80% of fiscal 2027 sales based on backlog. Super Micro Computer continues to emphasize early availability of AI systems as a competitive advantage.
In first-quarter fiscal 2027, the company was shipping NVIDIA Vera Rubin NVL72 racks with its DCBBS and DLC-2 cooling stack, alongside volume products built on GB300 NVL72, HGX B300 and RTX 6000 Pro platforms. It also launched NVIDIA Rubin and Vera CPU rack offerings, with optimized DSX-POD solutions planned. For AMD, MI350 and MI355X systems are seeing demand as the company advances Helios and MI450 total solutions. The company also integrates Intel Xeon 6+ platforms in its offerings.
Super Micro Computer is moving beyond stand-alone servers toward complete Data Center Building Block Solutions. DCBBS integrates GPU and CPU servers, enterprise storage, direct liquid cooling, power infrastructure, networking, data-center management software and lifecycle services. Its factory-tested, plug-and-play systems are designed to shorten customer time-to-deployment and time-to-online while supporting higher uptime.
These offerings are likely to remain at the forefront amid the ongoing investments in AI infrastructure by the leading data center customers and hyperscalers. The Zacks Consensus Estimate for SMCI’s fiscal 2027 revenues and earnings is pegged at $77.6 billion and $6.34, indicating growth of 98% and 74.7% year over year, respectively. Estimates for fiscal 2027 earnings have remained unchanged over the past seven days.
Image Source: Zacks Investment Research
The Case for HPE Stock
Hewlett Packard Enterprise is aligning compute, storage and networking with enterprise inferencing, agentic AI and data-intensive workloads. In the third quarter of fiscal 2026, Cloud & AI revenues reached $9 billion, up 25% year over year, with a 17% operating margin. Server revenues rose 35%, while traditional server orders increased 75% as customers favored AI-ready configurations and higher-value systems. For HPE, the fourth-quarter fiscal 2026 Cloud & AI revenues are expected to grow 60% to 72%, respectively.
In the third quarter of fiscal 2026, AI systems orders were $2.4 billion, up more than 30% sequentially, while AI systems backlog rose 14% sequentially to $6.8 billion. Private Cloud AI orders increased triple digits year over year, showing wider adoption of HPE’s on-premises AI factory approach. HPE is expanding its hybrid cloud operating model through GreenLake, which lets customers manage infrastructure and software across on-premises and cloud environments with consumption-based economics.
In the third quarter of fiscal 2026, GreenLake customers increased 18% year over year to 52,000 from 44,000, while management cited higher net retention as customers broadened usage of software and intelligent cloud services. The platform is reinforced by Morpheus for multi-cloud orchestration and OpsRamp for monitoring and observability. GreenLake also links HPE’s server, storage, networking and private cloud offerings under a common management and consumption layer.
Hewlett Packard Enterprise has used acquisitions to add networking, cloud management, security and data-management capabilities around its hybrid IT model. The company completed Juniper Networks in July 2025, adding campus, branch, data center, routing and security assets to Networking. Morpheus Data, acquired in 2024, expanded GreenLake orchestration, while the 2023 purchases of OpsRamp, Axis Security, Athonet and Pachyderm added observability, security, private cellular and data capabilities.
HPE's diversified portfolio spanning networking, traditional servers, storage, hybrid cloud, GreenLake and financial services could help cushion weakness in AI-related spending. The Zacks Consensus Estimate for HPE’s fiscal 2026 top and bottom lines imply growth of 35.8% and 95%, respectively. Estimates for fiscal 2026 bottom line have been revised upward in the past 30 days.
Image Source: Zacks Investment Research
Stock Price Performance and Valuation of SMCI & HPE
In the year-to-date period, shares of SMCI have lost 7.8%, while HPE shares have surged 108.8%.
YTD Price Performance Chart
Image Source: Zacks Investment Research
SMCI is trading at a forward 12-month ratio of 0.23X, which is lower than its median of 0.39X, while HPE is trading at a forward sales multiple of 1.21X, much below its median of 1.04X.
Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
Conclusion: SMCI vs. HPE Stock
Both SMCI and HPE are well-positioned to benefit from accelerating AI infrastructure demand, but their risk-reward profiles differ. SMCI offers higher near-term upside driven by explosive order growth, strong backlog and deep ties with leading chipmakers. HPE, on the other hand, provides more balanced and sustainable growth through diversified AI, networking and private cloud offerings, supported by improving earnings visibility and upward estimate revisions. On the valuation front, SMCI seems to be better positioned than HPE stock. Given these factors, SMCI seems to be a safer choice right now. SMCI sports a Zacks Rank #1 (Strong Buy), while HPE carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
View the Zacks #1 Rank List
Image: Bigstock
HPE vs. SMCI: Which AI Infrastructure Stock Has More Upside Now?
Key Takeaways
Super Micro Computer (SMCI - Free Report) and Hewlett Packard Enterprise (HPE - Free Report) are capitalizing on rising investments in AI infrastructure, offering high-performance server solutions designed to support increasingly demanding workloads.
However, their product portfolios, business models and growth strategies differ, shaping their competitive positioning. As enterprises and hyperscalers ramp up AI spending, which of the two stocks offers a more compelling investment opportunity?
Let's closely examine the fundamentals of the two companies, so investors can make an informed bet.
The Case for SMCI Stock
Super Micro Computer offers a broad portfolio of rack-scale Total IT Solutions, including complete servers, storage systems, blade servers, subsystems and server management software. Its platforms serve hyperscale cloud providers, enterprises and embedded edge applications. The company is increasingly focused on AI infrastructure, with systems based on NVIDIA and AMD accelerators, modular data center building block solutions and liquid-cooling technologies for high-density deployments.
Super Micro Computer’s exposure to AI infrastructure remains a central growth driver as its first-quarter fiscal 2027 sales reached $19.9 billion, up 298% year over year and 79% sequentially. SMCI’s AI solutions generated about 71% of quarterly revenue versus 59% in the prior quarter. Management expects AI-related solutions to account for 70% to 80% of fiscal 2027 sales based on backlog. Super Micro Computer continues to emphasize early availability of AI systems as a competitive advantage.
In first-quarter fiscal 2027, the company was shipping NVIDIA Vera Rubin NVL72 racks with its DCBBS and DLC-2 cooling stack, alongside volume products built on GB300 NVL72, HGX B300 and RTX 6000 Pro platforms. It also launched NVIDIA Rubin and Vera CPU rack offerings, with optimized DSX-POD solutions planned. For AMD, MI350 and MI355X systems are seeing demand as the company advances Helios and MI450 total solutions. The company also integrates Intel Xeon 6+ platforms in its offerings.
Super Micro Computer is moving beyond stand-alone servers toward complete Data Center Building Block Solutions. DCBBS integrates GPU and CPU servers, enterprise storage, direct liquid cooling, power infrastructure, networking, data-center management software and lifecycle services. Its factory-tested, plug-and-play systems are designed to shorten customer time-to-deployment and time-to-online while supporting higher uptime.
These offerings are likely to remain at the forefront amid the ongoing investments in AI infrastructure by the leading data center customers and hyperscalers. The Zacks Consensus Estimate for SMCI’s fiscal 2027 revenues and earnings is pegged at $77.6 billion and $6.34, indicating growth of 98% and 74.7% year over year, respectively. Estimates for fiscal 2027 earnings have remained unchanged over the past seven days.
Image Source: Zacks Investment Research
The Case for HPE Stock
Hewlett Packard Enterprise is aligning compute, storage and networking with enterprise inferencing, agentic AI and data-intensive workloads. In the third quarter of fiscal 2026, Cloud & AI revenues reached $9 billion, up 25% year over year, with a 17% operating margin. Server revenues rose 35%, while traditional server orders increased 75% as customers favored AI-ready configurations and higher-value systems. For HPE, the fourth-quarter fiscal 2026 Cloud & AI revenues are expected to grow 60% to 72%, respectively.
In the third quarter of fiscal 2026, AI systems orders were $2.4 billion, up more than 30% sequentially, while AI systems backlog rose 14% sequentially to $6.8 billion. Private Cloud AI orders increased triple digits year over year, showing wider adoption of HPE’s on-premises AI factory approach. HPE is expanding its hybrid cloud operating model through GreenLake, which lets customers manage infrastructure and software across on-premises and cloud environments with consumption-based economics.
In the third quarter of fiscal 2026, GreenLake customers increased 18% year over year to 52,000 from 44,000, while management cited higher net retention as customers broadened usage of software and intelligent cloud services. The platform is reinforced by Morpheus for multi-cloud orchestration and OpsRamp for monitoring and observability. GreenLake also links HPE’s server, storage, networking and private cloud offerings under a common management and consumption layer.
Hewlett Packard Enterprise has used acquisitions to add networking, cloud management, security and data-management capabilities around its hybrid IT model. The company completed Juniper Networks in July 2025, adding campus, branch, data center, routing and security assets to Networking. Morpheus Data, acquired in 2024, expanded GreenLake orchestration, while the 2023 purchases of OpsRamp, Axis Security, Athonet and Pachyderm added observability, security, private cellular and data capabilities.
HPE's diversified portfolio spanning networking, traditional servers, storage, hybrid cloud, GreenLake and financial services could help cushion weakness in AI-related spending. The Zacks Consensus Estimate for HPE’s fiscal 2026 top and bottom lines imply growth of 35.8% and 95%, respectively. Estimates for fiscal 2026 bottom line have been revised upward in the past 30 days.
Image Source: Zacks Investment Research
Stock Price Performance and Valuation of SMCI & HPE
In the year-to-date period, shares of SMCI have lost 7.8%, while HPE shares have surged 108.8%.
YTD Price Performance Chart
Image Source: Zacks Investment Research
SMCI is trading at a forward 12-month ratio of 0.23X, which is lower than its median of 0.39X, while HPE is trading at a forward sales multiple of 1.21X, much below its median of 1.04X.
Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
Conclusion: SMCI vs. HPE Stock
Both SMCI and HPE are well-positioned to benefit from accelerating AI infrastructure demand, but their risk-reward profiles differ. SMCI offers higher near-term upside driven by explosive order growth, strong backlog and deep ties with leading chipmakers. HPE, on the other hand, provides more balanced and sustainable growth through diversified AI, networking and private cloud offerings, supported by improving earnings visibility and upward estimate revisions. On the valuation front, SMCI seems to be better positioned than HPE stock. Given these factors, SMCI seems to be a safer choice right now. SMCI sports a Zacks Rank #1 (Strong Buy), while HPE carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.