Hewlett Packard Enterprise Raises AI Networking Outlook, Targets $800M in Juniper Synergies

Key Points

• HPE raised its Juniper integration synergy target to $800 million in annual run-rate savings by fiscal 2028, up from at least $600 million, citing faster-than-expected integration and lower costs.
• HPE increased its fiscal 2026 cumulative Networks for AI orders outlook to more than $3 billion and now expects fiscal 2027 networking revenue growth of high teens to low 20%, driven by AI data-center demand, Helios shipments and an Oracle infrastructure agreement.
• The company highlighted strong AI networking momentum, including a $1.2 billion AMD Helios order from Vultr, while projecting data-center networking revenue to grow at a low- to high-50% CAGR from fiscal 2026 through fiscal 2029.

Hewlett Packard Enterprise NYSE: HPE outlined an expanded growth strategy for its networking segment, citing AI-driven demand, progress integrating Juniper Networks and higher expected cost savings as key drivers of its outlook.

At HPE Networking Investor Day, Rami Rahim, executive vice president, president and general manager of HPE Networking, said the combined networking business is positioned to benefit as customers treat networks as strategic infrastructure for AI deployments. The company highlighted opportunities across data center networking, routing, campus and branch systems, and security.

“The network has never been more critical to how businesses operate and has never been more critical to how AI gets built, deployed, and consumed,” Rahim said in closing remarks.

Raised synergy target and integration milestones

HPE said it is increasing its fiscal 2028 annual run-rate cost-synergy target from at least $600 million to $800 million following the Juniper acquisition. The company had originally announced a $450 million target before raising it to at least $600 million when the transaction closed in July 2025.

Rahim said the company is ahead of its integration plan and has delivered greater-than-expected cost synergies while spending less on integration than anticipated. Savings are expected to come from areas including selling, general and administrative expenses, go-to-market harmonization and reduced duplication in research and development.

HPE said it had onboarded Juniper employees and combined its sales organizations under one catalog, one compensation plan and one set of account rules. The company plans to launch “Partner Day 1” on Nov. 1, bringing Juniper and Aruba channel programs together under HPE Partner Ready Vantage. HPE said roughly 10% of Juniper and HPE Aruba Networking partners overlapped before the acquisition, creating a potential cross-selling opportunity across its 60,000 partners.

The company also plans to begin integrated quoting and ordering in November as part of a broader commercial-systems integration. HPE expects to unify supply-chain processes by the end of 2027, with further improvements continuing through 2028.

AI networking outlook and customer wins

Rahim said data center networking is HPE Networking’s fastest-growing market, supported by AI infrastructure spending from cloud service providers, hyperscalers and neoclouds. HPE expects data center networking revenue to grow at a low- to high-50% compound annual growth rate from fiscal 2026 through fiscal 2029.

The company is targeting demand across “scale-up” networking within racks, “scale-out” networking connecting multiple racks or servers, and “scale-across” or data-center-interconnect deployments connecting infrastructure across facilities and geographies.

HPE said its AMD Helios offering combines Juniper networking technology with HPE compute, liquid-cooling and rack-scale engineering. Rahim said Helios represents more than a $1 billion networking opportunity over the next two years, and that networking-tray orders had already exceeded $200 million.

HPE also announced a $1.2 billion AMD Helios order from Vultr, which Rahim described as HPE’s first order for the integrated Helios system. The system includes the company’s purpose-built scale-up switch and software.

In routing, HPE expects revenue to grow at a low- to high-20% CAGR from fiscal 2026 through fiscal 2029. The company cited AI on-ramp applications, which connect users and branches to AI infrastructure, and data center interconnect as major sources of demand. HPE said it is participating in Oracle’s multiyear, gigawatt-scale AI infrastructure build-out through routing and switching platforms deployed globally.

Campus, security and self-driving networks

Campus and branch remains HPE Networking’s largest product category, representing approximately half of networking revenue, according to Rahim. The company expects the category to grow at a high-single-digit CAGR through fiscal 2029, supported by the Wi-Fi 7 refresh cycle and associated switching upgrades.

HPE said it is integrating capabilities from Juniper Mist and HPE Aruba Networking Central while retaining the platforms for different deployment models. Rahim said Marvis will serve as the AI engine for both offerings, while the company has also introduced access points designed to work with both platforms and expanded support for its CX switching portfolio.

ServiceNow Senior Director of Information Systems Management Sajeev Nair said the company has used Mist and Juniper technology since 2018 and later migrated its broader network environment to Juniper switching and routing. Nair said ServiceNow experienced a 90% reduction in incident volume and reduced network patching time from an estimated 2,000 to 3,000 hours annually to less than 60 hours.

“We have a bold goal within ServiceNow, and that is 100% autonomous network by 2028,” Nair said.

HPE also said security is a central part of its networking strategy, with offerings spanning SD-WAN, SASE, security service edge, next-generation firewalls and network access control. David Hughes, who leads HPE’s security business, said the company aims to embed security throughout the network, from Wi-Fi access points and switches to data center infrastructure.

Updated financial framework

HPE raised its expectation for fiscal 2026 cumulative Networks for AI orders to more than $3 billion, compared with a prior estimate of $2.5 billion to $3 billion. Rahim said third-quarter networking orders grew 3.5 times faster than revenue and that the company doubled networking supply purchase commitments during the quarter to help address constraints entering fiscal 2027.

The company now expects fiscal 2027 networking revenue growth of high teens to low 20%, above prior guidance of 14% to 17%. HPE expects the year to be more back-end loaded than usual because of the timing of Helios shipments and expected contributions from the Oracle agreement.

HPE reiterated its expectation for networking operating margin to reach the mid- to high-20% range in fiscal 2027, compared with an expected low-20% margin in fiscal 2026. Looking through fiscal 2029, the company projected high-teens networking revenue CAGR and operating margins in the mid- to high-20% range.

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, governments and other organizations. Its offerings are designed to help customers build, manage and secure data center, cloud and edge-computing environments.

HPE's portfolio includes enterprise servers, high-performance computing systems, data storage, networking equipment, software and technology consulting services. The company also provides hybrid cloud and as-a-service solutions through HPE GreenLake, allowing customers to access and manage computing, storage, data protection and other IT capabilities through a flexible consumption model.

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