Hewlett Packard Enterprise (HPE) has raised its fiscal 2027 revenue growth outlook for its Networking business. The revised projection is between high teens and low 20s percent. This increase is driven by anticipated demand for data centre networking, routing, campus and branch infrastructure, and security. AI adoption is a key factor in this expected growth.HPE announced this updated outlook at its Networking Investor Day on October 1, 2026. The company also presented longer-term growth targets and an increased cost synergy target. This follows its acquisition of Juniper Networks.
AI boosts data centre networking
HPE now expects Networking revenue to achieve a high-teens compound annual growth rate (CAGR) from FY26 through FY29. The segment is projected to maintain an operating margin in the mid-to-high 20s percentage range during this period. AI workloads are increasing demand for networking infrastructure. Enterprises, service providers, hyperscalers, and neoclouds are expanding distributed computing environments.Data centre networking is expected to be a significant growth driver. HPE forecasts its Data Center Networking business to record a low-to-high 50s percent CAGR through FY29. AI data centres require higher-performance networking. This manages latency, congestion, and connectivity between GPUs and other infrastructure. HPE’s portfolio includes both scale-out and scale-up switching. This expands its addressable data centre networking opportunity.Routing revenue is also expected to grow at a low-to-high 20s percent CAGR through FY29. This is attributed to increased connectivity requirements across various environments. These include users, devices, branches, data centres, and distributed AI clusters. For Campus & Branch, HPE anticipates a high single-digit revenue CAGR through FY29. Demand is supported by Wi-Fi 7 upgrades and the combined Aruba and Juniper Mist portfolio.Security revenue is projected to grow at a high single-digit CAGR through FY29. HPE is combining networking and security capabilities. This includes SASE, network access control, firewalls, and AI-powered operations.
Juniper synergy and Vultr order
HPE has increased its target for annual run-rate cost savings from Juniper Networks. The new target is $800 million by the end of FY28. This is up from the previous target of at least $600 million. The Juniper Networks acquisition was completed in July 2025. It integrated Juniper’s networking portfolio into HPE’s existing infrastructure business.The combined portfolio and go-to-market operations will support HPE’s expansion plans. These plans cover data centre networking, routing, campus and branch networking, and security. The networking outlook also follows HPE’s first order for its AMD Helios AI Rack by HPE systems. Vultr placed a $1.2 billion order for these systems. They include HPE networking hardware and software. This order is for deployment within Vultr’s cloud infrastructure environment.HPE doubled its quarter-over-quarter networking supply purchase commitments in Q3 FY26. This was done to support expected demand and address potential supply constraints. For FY27, HPE expects the Networking segment to deliver operating margins in the mid-to-high 20s percentage range. This aligns with the revised revenue growth outlook. HPE is positioning Networking as a larger contributor to its overall business. This is due to increasing AI infrastructure requirements across data centres and distributed enterprise environments.
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