HPE secures $1.2 billion order from Vultr and raises growth forecast for networking

Hewlett Packard Enterprise announced on Wednesday a $1.2 billion order from the cloud firm Vultr, as Reuters reports, and at the same time raised its long-term revenue growth forecast for its networking business.

According to Reuters, HPE will supply Vultr with AMD server racks for its data centers in the United States, while the company’s shares rose about 6% in pre-market trading.

The company now expects networking segment revenue to grow at an average annual rate (CAGR) in the “high teens” from fiscal 2026 to 2029, Reuters writes — a significant jump from the previous forecast of 5%–7% for the period 2025–2028. Likewise, the networking revenue growth forecast for fiscal 2027 was raised to “high teens to low 20s” percent, from 14%–17% previously.

The networking unit expanded significantly after the acquisition of Juniper Networks, and HPE raised its savings target from this acquisition to $800 million a year by the end of fiscal 2028, from a previous target of over $600 million.

As part of the order, HPE will supply AMD Helios AI racks equipped with artificial intelligence chips, together with HPE network switches, for Vultr’s data centers in the U.S.

“AI is reshaping the technology stack, making the network more strategic and driving considerable new demand from enterprises and service providers”, Reuters quotes the head of HPE’s networking unit, Rami Rahim, as saying.