HPE boosts networking growth outlook, gets $1.2 billion AI order from cloud firm Vultr
HPE•HPE raised its long-term networking revenue growth outlook to the high teens and forecast high-teens to low-20s growth for fiscal 2027. It also announced a $1.2 billion order to supply AMD AI server racks to Vultr.
1. Growth outlook raised
HPE now expects networking revenue to grow at a high-teens compound annual rate from fiscal 2026 to fiscal 2029, compared with its previous forecast of 5% to 7% annual growth. For fiscal 2027, it raised its networking growth forecast to the high teens to low 20s, from 14% to 17%.
2. Vultr order and savings
HPE said it will provide AMD Helios AI racks, equipped with AI chips and HPE networking switches and software, to Vultr's U.S. data centers under a $1.2 billion order. The company also raised its target for annual run-rate cost savings from its Juniper Networks acquisition to $800 million by the end of fiscal 2028, from at least $600 million.
3. Networking demand
HPE said demand for its servers and networking products is benefiting from customers' purchases to power AI applications. Networking unit head Rami Rahim said AI is reshaping the technology stack, making networks more strategic and driving new demand from enterprises and service providers.
