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Hewlett Packard Enterprise gave investors a double shot of good news on Wednesday, lifting its long-term growth targets for networking and landing a $1.2 billion order from cloud provider Vultr for AMD-powered AI server racks. The announcements came during HPE’s networking investor day in Sunnyvale, California, and sent shares up nearly 6% in premarket trading, Reuters reported.
What happened
- HPE raised its long-term networking revenue growth forecast to a high-teens compound annual growth rate for fiscal 2026 through 2029 — up from its prior 5%–7% annual growth outlook.
- It lifted its fiscal 2027 networking revenue growth forecast to the high-teens to low-20s percent range, up from 14%–17%, and expects a mid-to-high 20s percent operating margin in that period.
- Vultr ordered $1.2 billion of AMD Helios AI racks — the first order for the new platform — pairing AMD chips with HPE networking switches and software for Vultr’s U.S. data centers.
- HPE also raised its Juniper Networks cost-synergy target to $800 million in annual run-rate savings by the end of fiscal 2028, up from at least $600 million.
- Management projects data center networking revenue to grow at a low-to-high 50s percent CAGR through fiscal 2029, according to its SEC filing.
Why it matters
This is more than a one-day pop. “AI is reshaping the technology stack, making the network more strategic and driving significant new demand,” said networking unit head Rami Rahim. The message: the AI buildout is broadening beyond GPUs into networking gear, where HPE competes directly with Dell and Super Micro Computer. The guidance lift more than doubles the old growth trajectory and suggests the Juniper acquisition is integrating ahead of plan.
It is also a validation moment for AMD. The Vultr order is the first real at-scale proof point for AMD’s Helios rack platform, putting AMD’s AI silicon inside a full-rack system that HPE sells and supports.
What to watch
Investors will want to see Vultr’s deployment schedule and repeat orders from other cloud providers. The bigger test is execution: whether HPE can deliver the high-teens growth and the $800 million in Juniper savings on time. HPE’s fiscal Q4 results will be the next checkpoint on the AI and networking backlog.
Related reading: HPE Stock Hits Record on AI Demand — bullounge.com
Do you think networking is now the second-biggest AI beneficiary after chips, or is this guidance peak optimism? Share your take in the comments.
Sources: Reuters, CoinCentral.
Auto-posted by the Bull Lounge news desk. Not financial advice.
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