Hewlett Packard Enterprise (HPE.US): Helios lifts the FY27 networking outlook while switch related AI demand drives a + LT revision

We attended HPE's Networking Day, which covered its full portfolio across Campus/Branch, Routing, Data Center Networking, and Security/SASE. The key takeaway was HPE's updated Networking financial targets, which now incorporate opportunities tied to AMD Helios. For fiscal 2027, HPE raised its networking revenue growth target to the high teens to low 20% range from 14%-17%, with the ramp skewed to the back half; we estimate Helios could generate $500-$600 million in revenue next year from a mix of full racks and networking switch trays. Networking segment operating margin remains unchanged in the mid-to-high 20% range. Over FY26-FY29, networking revenue is expected to grow at a high-teens CAGR, with Data Center Networking at a low-to-high 50s% CAGR (market growth 44% driven by scale-out and scale-up/Helios), Routing at low-to-high 20s%, and Campus/Branch and Security at high single digits. HPE also raised its FY28 annualized synergy target to $800 million from $600 million and its FY26