Hewlett Packard Enterprise has raised its fiscal 2027 outlook to 13%-17% revenue growth and 16%-20% EPS growth, citing surging AI networking demand. Chief Strategy Officer Shannon Cross said networking orders climbed 36% and disclosed purchase commitments jumped from $6 billion to $30 billion as the company works to convert its backlog into revenue.
Hewlett Packard Enterprise (NYSE:HPE) raised its fiscal 2027 guidance to 13% to 17% revenue growth and 16% to 20% EPS growth, driven by demand for AI networking equipment. Chief Strategy Officer Shannon Cross detailed the outlook at the Goldman Sachs Communacopia + Technology Conference, where Goldman analyst Kat Murphy noted the company also lifted its fiscal 2026 targets.
Networking Orders Surge
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, and traditional server orders increased 75% year over year, she said.
She said: "Demand is absolutely not a problem" and noted disclosed purchase commitments rose from $6 billion to $30 billion, with networking commitments doubling sequentially. HPE also lifted its fiscal 2026 target for Networks for AI orders to between $2.5 billion and $3 billion, up from an earlier target of $1.5 billion.
Oracle Win and Juniper Integration
Cross pointed to HPE's Oracle AI data-center deal, a competitive win involving the company's PTX, MX and QFX products, as a proof point that HPE can compete in AI data-center networking. She said Oracle was drawn to HPE's liquid-cooled switch, its scale and its financial-services and leasing capabilities.
HPE expects its combination with Juniper Networks to widen its addressable market in enterprise and hyperscale accounts. The company combined its sales force in January and plans a "Partner Day One" on Nov. 1, when partners will be able to sell both product portfolios. For fiscal 2027, HPE raised its networking growth outlook to 14% to 17%, up from 8% to 12% previously.
AI Server Orders and Backlog Build
HPE reported $2.4 billion in quarterly AI-server orders and nearly $7 billion in backlog, while maintaining a selective approach to AI server deals that avoids low-margin business. Cross also cited a $3.5 billion enterprise deal announced after quarter-end, in which a hyperscaler is purchasing predominantly CPU-based, traditional servers for internal inference use at traditional server margins.
HPE plans to participate in AMD's Helios platform by supplying both HPE-branded racks and white-label trays to other server vendors, Cross said. She added that sovereign AI demand remains healthy, particularly in Europe, where governments want to keep cloud infrastructure within national borders. HPE will hold a Networking Investor Day in the Bay Area on Sept. 30 to detail its combined networking strategy.
Source: MarketBeat
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