I'm LongbridgeAI, I can summarize articles.Hewlett Packard Enterprise raised its fiscal 2027 outlook, citing surging AI networking demand. The company increased revenue growth guidance to 13%-17% and EPS growth to 16%-20%. Key drivers include strong order growth in networking, storage, and traditional servers, alongside a $30 billion increase in supply commitments. HPE also highlighted strategic moves such as the Juniper Networks integration and an Oracle data-center deal, while maintaining selective AI server deals to ensure margin integrity.
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Hewlett Packard Enterprise NYSE: HPE Chief Strategy Officer Shannon Cross said the company is seeing strong demand across networking, storage and traditional servers, while supply availability and order conversion remain key priorities as it targets growth in fiscal 2027.
Speaking at the Goldman Sachs Communacopia + Technology Conference, Cross highlighted HPE's most recent quarterly performance, including $1.11 in earnings per share, nearly $1 billion in free cash flow and what she described as the company's first quarter with more than $1 in earnings per share. She said the company also raised its free-cash-flow target to at least $3.75 billion for fiscal 2026 and at least $5 billion for the following year.
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Goldman Sachs analyst Kat Murphy noted that HPE had raised its fiscal 2026 and fiscal 2027 outlook, with fiscal 2027 guidance calling for 13% to 17% revenue growth and 16% to 20% EPS growth. Cross said the company is focused on translating its expanding order backlog into revenue.
Networking Demand Drives Outlook
Cross said networking revenue increased 10% in the latest quarter, while orders rose 36%. Storage revenue also grew 10%, with order growth running at roughly twice that rate, she said. Traditional server orders increased 75% year over year.
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HPE's confidence in its outlook partly reflects larger multiyear supply agreements for components in tight supply, Cross said. She noted that disclosed purchase commitments rose from $6 billion to $30 billion, with networking commitments doubling sequentially and the remaining increase tied to cloud and AI-related components.
“Demand is absolutely not a problem,” Cross said. “It’s basically being able to deliver the customers.”
HPE has raised its fiscal 2026 target for Networks for AI orders to between $2.5 billion and $3 billion, compared with an earlier target of $1.5 billion. Cross pointed to demand across routing and switching products, including the PTX router, MX router and QFX platform.
She said the company sees particular opportunity in routing infrastructure used to connect AI data centers. Cross also cited HPE's direct liquid-cooled QFX switch, which she said is a 100% direct liquid-cooled Tomahawk 6 top-of-rack switch and reached the market at least six months ahead of competing products.
Oracle Deal and Juniper Integration
Cross discussed HPE's previously announced Oracle AI data-center opportunity, describing it as a competitive win involving PTX, MX and QFX products. She said Oracle was attracted by the liquid-cooled switch, HPE's broader scale and its financial-services and leasing capabilities.
The deal serves as a proof point that HPE can compete in AI data-center networking, Cross said, adding that the company is speaking with other market participants about similar opportunities.
HPE expects its combination with Juniper Networks to expand the addressable market for networking products in enterprise and hyperscale accounts. Cross said HPE combined its sales force in January and plans to hold a “Partner Day One” on Nov. 1, when partners will be able to sell both product portfolios.
In campus and branch networking, Cross said HPE recorded low-teens order growth and 8% revenue growth, supported by a Wi-Fi 7 refresh cycle and customer interest in Juniper's Mist technology. She said the company plans to converge the Aruba and Mist offerings over time while seeking to maintain satisfaction among both customer bases.
For fiscal 2027, HPE has raised its networking growth outlook to 14% to 17%, from 8% to 12% previously. Cross said the outlook includes some Oracle contribution and modest acceleration in the core business. She attributed expected segment margin expansion into the mid-to-high 20% range primarily to synergies, while saying HPE will continue investing in silicon development, new products and the AMD Helios platform.
AI Servers and Private AI Infrastructure
Cross said HPE intends to participate in AMD Helios through two approaches: supplying full HPE-branded racks containing server and scale-up networking technology, and supplying white-label trays to other server vendors working with AMD. She said the offering could help HPE pursue hyperscale and neocloud opportunities with a stronger margin profile because it incorporates HPE networking intellectual property.
HPE has maintained a selective approach to AI server deals, Cross said, avoiding what she called “empty-calorie revenue” when margins are insufficient. The company reported $2.4 billion in AI server orders during the quarter and nearly $7 billion in backlog, according to the discussion.
Cross also highlighted a $3.5 billion enterprise deal announced after quarter-end, which she described as a hyperscaler purchasing predominantly CPU-based, traditional servers for internal inference use. She said the deal carries traditional server margins and is expected to move through the business relatively quickly.
HPE sees a growing opportunity for customers to deploy private AI infrastructure to control token costs and keep sensitive data within their own environments. Cross said organizations in sectors including retail, technology, banking and pharmaceuticals are considering such deployments. HPE uses its own Private Cloud AI hardware internally for some workloads, she said.
Cross added that sovereign AI demand remains healthy, particularly in Europe, where governments are interested in maintaining cloud infrastructure within national borders for defense, government services and domestic technology development.
HPE will hold a Networking Investor Day in the Bay Area on Sept. 30, where Cross said management plans to provide additional detail on the combined networking business and its strategy.
About Hewlett Packard Enterprise (NYSE:HPE)
Hewlett Packard Enterprise Company NYSE: HPE is a global technology company that provides information technology products, services and solutions for businesses and other organizations. Its offerings are designed to support data centers, cloud computing, artificial intelligence, networking and the management of distributed IT environments.
HPE's portfolio includes enterprise servers, data storage systems, networking equipment, high-performance computing and software. Through its HPE GreenLake platform, the company also delivers cloud and as-a-service solutions that allow customers to access computing, storage, data protection and other IT capabilities through a flexible consumption model.
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