Hewlett Packard Enterprise Raises Networking Growth Forecast on AI Boom

Hewlett Packard Enterprise raised the long-term revenue growth forecast for its networking business on Wednesday, citing the surge in artificial intelligence. The company now expects the segment's compound annual growth rate to reach the high teens from fiscal 2026 to 2029, a significant increase from its previous projection of 5% to 7%.

As part of its expansion, the company secured a $1.2 billion order from cloud firm Vultr. This deal provides AMD Helios AI racks, including AI chips, networking switches, and software, for Vultr data centers in the United States. Following the acquisition of Juniper Networks, the company also increased its target for annual run-rate cost savings to $800 million by the end of fiscal 2028.

Shares of the company rose nearly 6% in premarket trading following these announcements during its networking investor day. Rami Rahim, head of the networking unit, stated that AI is reshaping the technology stack and driving new demand from enterprises and service providers.