Barclays raised its HPE price target to $83 from $79 and maintained an ‘Overweight’ rating following the company’s Networking Investor Day.
- HPE raised its fiscal 2027 networking revenue growth outlook to the high-teens to low-20% range from its previous 13% to 17% framework.
- HPE said its combined networking business could grow from $9.3 billion in fiscal 2024 to roughly $11.3 billion in fiscal 2026, with operating profit nearly doubling.
- HPE raised its target for Juniper-related annual run-rate cost synergies to $800 million by fiscal 2028 from at least $600 million previously.
Hewlett Packard Enterprise (HPE) shares rose in early trade Thursday, extending gains after hitting a record high above $67 in the prior session, following a price target increase from Barclays that implies roughly 23% upside from the all- time high.
Barclays raised its price target to $83 from $79 and kept an ‘Overweight’ rating following HPE’s Networking Investor Day on Wednesday, the company’s first such event since closing its roughly $14 billion acquisition of Juniper Networks a little over a year ago.
HPE stock was up as much as 1.7% in pre-market trade. On Stocktwits, retail sentiment around the shares remained in ‘bearish’ territory over the past day.
HPE Raises Networking Growth Outlook
Barclays noted HPE raised its fiscal 2027 networking revenue growth outlook to the high-teens to low-20% range, up from the 13% to 17% framework the company had given on its third quarter (Q3) earnings call just weeks earlier.
The firm also highlighted HPE’s view that Helios, AMD’s new rack-scale AI system, represents an over $1 billion networking opportunity for HPE over the next two years.
Juniper Acquisition Adds To HPE Networking Growth
HPE said at its investor day that its combined networking business is on track to grow from $9.3 billion in fiscal 2024 to roughly $11.3 billion in fiscal 2026. Operating profit is expected to nearly double over the same period.
The company also raised its target for Juniper-related cost synergies to $800 million in annual run-rate savings by fiscal 2028, up from at least $600 million previously. HPE attributed the increase to faster-than-expected integration.
The networking business now includes Juniper alongside HPE’s legacy Aruba and data-center networking operations, giving the company a broader portfolio aimed at enterprise, cloud and AI infrastructure customers.
AI Infrastructure Drives HPE Networking Demand
HPE executives pointed to AI-driven data-center demand as a key growth driver, including the company’s recently announced $1.2 billion order from cloud provider Vultr to deploy AMD Helios AI rack systems across its U.S. data centers.
HPE is also involved in a separate gigawatt-scale infrastructure agreement with Oracle that uses HPE Juniper switching and routing equipment. The company now expects data-center networking revenue to grow at a low- to high-50% compound annual rate from fiscal 2026 through fiscal 2029.
HPE executives acknowledged that the business remains supply-constrained heading into next year, although those constraints are expected to ease.
HPE stock has gained over 160% year-to-date.
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