HPE Networking doubles down on growth strategy as AI reshapes enterprise technology infrastructure. The company is setting priorities that are about long-term value creation. It will outline those plans at HPE Networking Investor Day. HPE is hiking its fiscal 2027 revenue growth guidance for its Networking business segment. The company is also on track to pick up market share in several key networking categories.
The categories are Data Center Networking, Routing and Campus & Branch. HPE also plans to build its position in network security and adjacent technology. The company is looking to capitalize on the growing demand from enterprise and service providers. Meanwhile, the adoption of AI continues to increase networking requirements across modern technology environments.
“AI is reshaping the technology stack, making the network more strategic and driving significant new demand from enterprises and service providers,” said Rami Rahim, executive vice president, president and general manager, Networking, HPE. “HPE is positioned to capture that demand through an integrated networking portfolio, expansive go-to-market scale, and greater cross-sell capabilities. Together, these advantages strengthen our ability to deliver sustainable, profitable growth and create long-term shareholder value.”
HPE Networking Expands Across Core Markets
At HPE Networking Investor Day, the company will present its expanding networking opportunity. The portfolio serves enterprises, service providers, hyperscalers, and neocloud customers.
HPE expects its Networking business to outperform the market over the next three years. The company also expects to gain share across Data Center Networking, Routing, and Campus & Branch.
The strategy is a response to the growing demand for AI-ready network infrastructure. Organizations will also require more powerful connectivity as workloads become more distributed.
Provides Data Center Networking AI Infrastructure
AI is fast changing the architecture and infrastructure requirements of data centers. Consequently, the importance of high-performance networking has increased. The networks that modern artificial intelligence systems run on need to be able to handle demanding workloads. Good GPU utilization still requires low latency, less congestion, and network stability.
HPE offers capabilities across both scale-out and scale-up switching environments. Therefore, the company expects to expand its addressable data center networking opportunity. HPE expects Data Center Networking revenue to grow at a low-to-high 50s percent CAGR through fiscal 2029.
Routing Demand Grows With Distributed AI
AI is also generating new demand for routing technologies. Customers increasingly connect users, devices, branches, data centers, and distributed AI clusters. HPE plans to build on its long-standing routing expertise. The company also brings deep relationships across cloud and service-provider markets.
Its MX and PTX platforms use Trio and Express silicon. These platforms support HPE’s strategy for addressing evolving routing requirements. HPE expects Routing revenue to grow at a low-to-high 20s percent CAGR through fiscal 2029.
Campus and Branch Networking Enters Modernization Cycle
Campus & Branch networking is entering a broad modernization cycle. Wi-Fi 7 upgrades are expected to support this multi-year market opportunity. HPE plans to use its combined Aruba and Juniper Mist portfolio. The company also expects its installed base to support further growth.
In addition, HPE will leverage its global go-to-market model. This approach can help the company address changing enterprise networking requirements. HPE expects Campus & Branch revenue to grow at a high single-digit percent CAGR through fiscal 2029.
Security Becomes More Integrated With Networking
In the enterprise the lines between networking and security continue to blur. HPE is addressing this by embedding security throughout its networking portfolio.
The firm relies on a mix of SASE, network access control and firewalls. It also provides identity-based policy enforcement and AI-driven network operations. HPE expects Security revenue to grow at a high single-digit percent CAGR through FY29.
HPE Raises Juniper Cost Synergy Target
HPE is also increasing its target for Juniper Networks-related cost synergies. The company now expects $800 million in annual run-rate savings by fiscal 2028. Previously, HPE had announced a target of at least $600 million. The revised target reflects the company’s updated integration expectations.
Fiscal 2027 Networking Growth Outlook
HPE is raising its FY27 Networking segment revenue growth outlook. The company now expects growth between the high teens and low-20s percent. It also expects Networking segment operating margin to remain in the mid-to-high 20s percent range.
Meanwhile, HPE is preparing for strong networking demand entering FY27. The company previously doubled its quarter-over-quarter networking supply purchase commitments. The increase occurred during the third quarter of FY26. HPE took this step to support demand and reduce potential supply constraints.
Long-Term Financial Growth Framework
HPE is also raising its long-term Networking revenue expectations. The company projects a high-teens percent CAGR from FY26 through FY29. Additionally, HPE expects the segment to maintain strong operating margins.
The company projects a mid-to-high 20s percent operating margin from FY27 through FY29. These projections support HPE’s broader strategy for profitable Networking growth. The company expects AI adoption to create additional opportunities across networking infrastructure.
AMD Helios AI Rack Order Strengthens AI Strategy
HPE also announced its first system order for AMD Helios™ AI Rack by HPE. Vultr placed a $1.2 billion order for the new systems. Vultr is described as the world’s largest privately-held cloud infrastructure company. The order will support deployment of AMD Helios™ AI Rack by HPE systems.
The new system is built on HPE Networking hardware and software from the ground up. The order also underscores the growing importance of networking in AI infrastructure. In general HPE Networking is aligning its portfolio to the big changes in technology. The company is targeting opportunities including AI data centers, routing, campus networking, and security.
Its updated financial outlook also incorporates expectations for continued Networking growth. Meanwhile, the additional Juniper synergies target gives an additional dimension to its long-term value creation strategy.
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News Source: Businesswire.com
