HPE Lifts Networking Outlook, Lands $1.2B AI Rack Order
HPE has more than doubled off its 52-week low of $19.84.
Summary
HPE raised its FY27 Networking growth outlook to high teens–low 20s with operating margin mid-to-high 20s, up from prior guidance, and expects Networking revenue to grow at a high-teens CAGR from fiscal 2026 through fiscal 2029. The company also lifted its Juniper cost synergy target to $800M run-rate by FY28, versus the previous $600M target. A new $1.2B order from Vultr for AMD Helios AI Rack systems—HPE's first order for the new system—validates AI infrastructure demand and builds on nearly three years of Vultr-Juniper collaboration. HPE expects to outgrow the market growth rates it will outline at the event and gain share over the next three years in Data Center Networking, Routing, and Campus & Branch, with Data Center Networking revenue growing at a low-to-high 50s percent CAGR through fiscal 2029, Routing at a low-to-high 20s percent CAGR, and Campus & Branch and Security each at a high single-digit percent CAGR. HPE expects the Networking segment to maintain an operating margin target of mid-to-high 20s percent from FY27 through FY29. The AMD Helios AI Rack by HPE system features purpose-built HPE Networking hardware and software, and Vultr, the world's largest privately-held cloud infrastructure company, will deploy the systems at its U.S. cloud data centers. HPE and AMD will support Vultr's effort to meet service provider and enterprise demand for model training and inferencing workloads in Vultr's data centers. HPE previously announced it doubled its quarter-over-quarter networking supply purchase commitments in the third quarter of FY26. This follows record Q3 results and raised FY26/FY27 outlooks reported on September 2. HPE shares rose 6.68% to $64.98 after the announcement.
Updated with a Benzinga report · What changed
Updates
· Benzinga — HPE shares rose 6.68% to $64.98 after the announcement.
- Vultr will deploy AMD Helios AI Rack by HPE systems at its U.S. cloud data centers.
- HPE expects Networking revenue to grow at a high-teens CAGR from fiscal 2026 through fiscal 2029.
· Dow Jones Newswires — HPE's $1.2B Vultr order is its first for the AMD Helios rack system and builds on nearly three years of Vultr-Juniper collaboration.
- HPE and AMD will support Vultr's effort to meet service provider and enterprise demand for model training and inferencing workloads in Vultr's data centers.
· SEC 8-K — HPE's 8-K attaches the press release announcing the raised FY27 Networking outlook and the $1.2B Vultr order.
- Networking Growth Outlook
- HPE expects to outgrow the market growth rates it will outline at the event and gain share over the next three years in Data Center Networking, Routing, and Campus & Branch.
- HPE expects its Data Center Networking revenue to grow at a low-to-high 50s percent CAGR through fiscal 2029.
- HPE expects its Routing revenue to grow at a low-to-high 20s percent CAGR through fiscal 2029.
- HPE expects its Campus & Branch revenue to grow at a high single-digit percent CAGR through fiscal 2029.
- HPE expects its Security revenue to grow at a high single-digit percent CAGR through fiscal 2029.
- Supply Commitments — HPE previously announced it doubled its quarter-over-quarter networking supply purchase commitments in the third quarter of FY26.
- Operating Margin — HPE expects the Networking segment to maintain an operating margin target of mid-to-high 20s percent from FY27 through FY29.
- Vultr Order — The $1.2 billion order from Vultr is HPE's first order for the new AMD Helios™ AI Rack by HPE system, which features purpose-built HPE Networking hardware and software. Vultr is the world's largest privately-held cloud infrastructure company.
All 10 details
- HPE expects to outgrow the market growth rates it will outline at the event and gain share over the next three years in Data Center Networking, Routing, and Campus & Branch.
- HPE expects its Data Center Networking revenue to grow at a low-to-high 50s percent CAGR through fiscal 2029.
- HPE expects its Routing revenue to grow at a low-to-high 20s percent CAGR through fiscal 2029.
- HPE expects its Campus & Branch revenue to grow at a high single-digit percent CAGR through fiscal 2029.
- HPE expects its Security revenue to grow at a high single-digit percent CAGR through fiscal 2029.
- HPE previously announced it doubled its quarter-over-quarter networking supply purchase commitments in the third quarter of FY26.
- HPE expects the Networking segment to maintain an operating margin target of mid-to-high 20s percent from FY27 through FY29.
- The $1.2 billion order from Vultr is HPE's first order for the new AMD Helios™ AI Rack by HPE system.
- The AMD Helios™ AI Rack by HPE system features purpose-built HPE Networking hardware and software.
- Vultr is the world's largest privately-held cloud infrastructure company.
- Networking Growth Outlook
At the time of this announcement, HPE was trading at $61.39 on NYSE in the Technology sector, with a market capitalization of approximately $81.6B. The 52-week trading range was $19.84 to $65.65. This news item was assessed with positive market sentiment and an importance score of 8 out of 10. Source: Wiseek News.