HPE's Networking Orders Surge Amid Growing Demand for AI Solutions
Hewlett Packard Enterprise's (HPE) networking orders continue to rise, driven by increased demand for its solutions. In its third quarter fiscal 2026 earnings report, HPE reported a significant increase in networking revenues, reaching $2.89 billion with a growth of 74.9% year over year on a reported basis and 10% on a normalized basis.
The company's operating margin was 22%, compared to 22.1% in the same quarter last year. Normalized Networking orders increased by 36%, outpacing revenue growth. This surge in demand is attributed to HPE's model of packaging compute, storage, networking, and cloud management into AI systems and Private Cloud AI solutions.
The company has also signed a major deal with Oracle for routers and switches supporting a major AI cloud infrastructure buildout. Additionally, Networks for AI orders reached $700 million in the quarter, taking cumulative orders to $2.2 billion. The integration of HPE's Juniper acquisition is progressing ahead of schedule, prompting the company to raise its fiscal 2026 target to $2.5-$3 billion.
HPE faces intense competition from companies like Cisco and Arista Networks in the AI networking space. However, with a strong portfolio of solutions and growing demand for AI inference and agentic workloads, HPE is well-positioned to maintain its growth trajectory.