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Hewlett Packard Enterprise (HPE) is sharply higher today and reached a new all-time high after raising its Networking outlook and outlining priorities for long-term growth ahead of its Networking Investor Day. Notably, HPE raised its FY27 Networking outlook again, just weeks after lifting it with its Q3 (Jul) results, while also increasing its expected Juniper cost synergies.

• Networking: HPE now expects FY27 Networking revenue growth in the high teens to low-20s, up from the 14-17% outlook raised earlier this month. Data Center Networking revenue is expected to grow at a low-to-high-50s CAGR through FY29, driven by AI demand for higher-bandwidth, lower-latency networks. In Q3, Networking revenue reached $2.9 bln, up 10% normalized, while orders rose 36%. HPE also announced its first AMD Helios AI Rack order, a $1.2 bln deal with Vultr featuring purpose-built HPE Networking hardware and software.
• Routing: HPE expects Routing revenue to grow at a low-to-high-20s CAGR through FY29, as connectivity needs rise across data centers and distributed AI infrastructure. Routing revenue grew 23% normalized in Q3, while Data Center Switching & Routing orders rose high double digits.
• Campus, Branch & Security: HPE expects both businesses to grow at a high-single-digit CAGR through FY29, with Campus & Branch benefiting from enterprise network modernization and Security increasingly integrated across the networking stack. In Q3, normalized revenue grew 8% in Campus & Branch and 12% in Security.
• Juniper: HPE now expects $800 mln in annualized run-rate cost synergies by the end of FY28, up from at least $600 mln previously. At Q3, HPE had already said integration was running ahead of plan.
• Long-term framework: HPE now expects Networking revenue to grow at a high-teens CAGR from FY26-FY29, while maintaining mid-to-high-20s operating margins from FY27-FY29.

Briefing.com Analyst Insight

HPE's Networking business is becoming an increasingly important growth engine as AI infrastructure spending expands beyond compute into switching, routing and connectivity. Q3 already showed demand running well ahead of revenue, with normalized orders up 36% versus 10% revenue growth. What stands out most is the pace of the revisions, with HPE raising its FY27 Networking outlook again just weeks after lifting it alongside Q3 results and now laying out a stronger growth framework through FY29. Juniper is also broadening HPE's reach across data center networking, routing, campus and security, while the higher synergy target points to solid integration execution and provides another lever to support margins as the combined business scales.