Shares of Hewlett Packard Enterprise (HPE) are surging 5.17% in pre-market trading on Thursday, following the company's impressive third-quarter results and raised full-year guidance. The tech giant's performance was bolstered by strong demand in its server and networking segments, particularly driven by the growing artificial intelligence (AI) market.

HPE reported better-than-expected revenue for the third quarter, showcasing the company's ability to capitalize on the surging demand for AI servers. As big tech companies and startups race to deploy generative AI services like ChatGPT, which require immense computing power, HPE has positioned itself as a key player in providing the necessary infrastructure. The company's success in this area has led to a 54% jump in quarterly networking revenue, further boosted by its acquisition of Juniper Networks.

Adding to the positive sentiment, HPE raised its fiscal 2025 outlook. The company now expects adjusted earnings per share between $1.88 and $1.92, up from previous estimates and surpassing analyst expectations of $1.85. Additionally, HPE increased its fiscal revenue forecast to a range of $34.34 billion to $34.94 billion, well above the $33.45 billion analyst estimate. This optimistic guidance has sparked a wave of analyst upgrades, with several firms raising their price targets for HPE stock. Notable upgrades include Wells Fargo increasing its target to $26 from $22, Barclays maintaining a Buy rating with a $26 price target, and Raymond James raising its target to $30 from $29 while maintaining a Strong Buy rating. These positive developments have contributed to the stock's significant pre-market rally, as investors express confidence in HPE's growth trajectory and its strategic positioning in the rapidly expanding AI infrastructure market.