Hewlett Packard Enterprise (HPE): Networking Investor Day Reinforces Accelerating Growth as AI Leverage Builds

We attended HPE's Networking Investor Day in Sunnyvale, California, where the event helped alleviate recent investor scrutiny around a prior Networking outlook. Management raised the FY27 Networking revenue growth outlook to high-teens to low-20% (vs. +14-17% prior) and introduced a new high-teens FY26-FY29 CAGR, with strong growth across Data Center, Routing, and Campus & Branch, as well as solid growth in Security. The key incremental driver is HPE's increasing exposure to AI infrastructure investments beyond the traditional campus opportunity, with the company targeting scale-out, scale-across/DCI, and, most importantly, scale-up opportunities, with the announced Oracle (scale-out, DCI) and Vultr (AMD Helios rack, inc. scale-up switch) wins providing initial validation. Management upsized the Juniper annualized run-rate cost synergy target to $800 mn by FY28 from $600+ mn. We maintain our Overweight rating with a December 2027 price target of $70 based on ~14x our FY28 EPS estimate,