At its Networking Investor Day, Hewlett Packard Enterprise projected high-teens annual growth through fiscal 2029, lifted its Juniper savings goal to $800 million and disclosed a $1.2 billion order for AMD-based AI racks.
Hewlett Packard Enterprise delivered the kind of news one analyst had said it was missing.
On Sept. 14, Evercore ISI lowered the stock to In-Line, kept a $65 price target and pointed to a lack of near-term catalysts. HPE fell 11% that day, its worst session in more than a year. On Wednesday, at a Networking Investor Day, the company raised its growth outlook for networking, increased its merger-savings target and announced its first order for a new AI rack system. The stock rose about 5.7% to $64.99 in the afternoon, within pennies of Evercore's target and just under its 52-week high of $65.65.
The new numbers
HPE now expects fiscal 2027 networking revenue to grow in the high teens to low 20s percent, with segment operating margins in the mid-to-high 20s. From fiscal 2026 through 2029, it projects networking revenue compounding at a high-teens rate, with margins staying in that range from 2027 on.
Data-center networking is the fastest piece, projected to compound at a rate in the low-to-high 50s percent through fiscal 2029. Routing is projected in the low-to-high 20s, and campus and branch and security each at a high-single-digit rate.
Annual savings from the Juniper Networks acquisition are now targeted at $800 million by the end of fiscal 2028, up from at least $600 million, an increase of one-third.
"AI is reshaping the technology stack, making the network more strategic and driving significant new demand from enterprises and service providers," said Rami Rahim, president of HPE's networking business.
The order
HPE said Vultr, a privately held cloud infrastructure provider, placed a $1.2 billion order for AMD Helios AI racks built by HPE, the first order for the system. HPE did not say when the racks will ship or when the revenue will be recognized. It also noted that it doubled its networking supply purchase commitments from the prior quarter in its fiscal third quarter to ease supply constraints.
A move of its own
The gain was specific to HPE. Dell rose about 1%, Super Micro Computer slipped 0.4% and Arista Networks gained 0.7%. Early in the afternoon the technology sector was up about 1.1% and the S&P 500 about 0.5%, leaving roughly 4.5 points of HPE's rise unexplained by the sector. That pattern suggests investors treated the day as a networking story rather than an AI-server story.
Two readings
One reading is that the framework marks a genuine step up. At its October 2025 analyst meeting, HPE guided networking revenue to grow 5% to 7% a year from fiscal 2025 through 2028, and the stock fell more than 8% that day. The new projection calls for high-teens growth, though over a later window that includes a full year of Juniper, so the two are not directly comparable. Bank of America's Wamsi Mohan, who rates the stock Buy with an $88 target, has argued that the Helios opportunity could grow over time from a few hundred million dollars in switches to several billion dollars in full racks. Raymond James rates HPE Outperform with an $86 target.
The other reading is that much of the direction was already known. HPE raised its fiscal 2027 total revenue growth outlook to 13% to 17%, from 8% to 12%, with its third-quarter results in early September. The new category ranges are wide, spanning several points of growth for data-center networking. And the Vultr order comes from a single private customer with no delivery schedule attached. On that view, a stock sitting at Evercore's target has already absorbed the news.
What to watch
HPE's fiscal fourth-quarter report, expected in early December, will be the first measured against the new framework. Shipment timing on the Vultr order, and any rating changes that cite the investor day, will show which reading analysts adopt.