Key points
- Vultr orders $1.2 billion of HPE's AMD Helios racks
- HPE raises its networking growth forecasts
- Juniper annual savings target rises to $800 million
Hewlett Packard Enterprise (HPE) has won a $1.2 billion order from cloud provider Vultr for AMD (AMD) Helios AI racks, HPE's first order for the system. HPE also raised its networking forecasts on Wednesday, and its shares rose 6.6% in premarket trading to $65.53 as of 9:18 a.m. ET.
Vultr will deploy the AMD Helios AI Rack by HPE systems at its cloud data centers in the United States, HPE said in a release. HPE describes Vultr as the world's largest privately held cloud infrastructure company. The release doesn't say how many racks Vultr is buying or when they'll be delivered.
What is in a Helios rack?
Each rack holds 72 AMD Instinct MI455X GPUs, along with AMD EPYC "Venice" CPUs and AMD Pensando Vulcano network cards. HPE supplies six HPE Juniper Networking QFX5252 switch trays per rack, which connect all 72 GPUs over Ethernet. That kind of scale-up switching links the GPUs inside a rack so they can work as one large system.
"AI is driving the largest infrastructure buildout in history," said Antonio Neri, HPE's president and CEO. Vultr CEO J.J. Kardwell said "demand for high-performance AI infrastructure continues to outpace available capacity."
The order builds on nearly three years of work between Vultr and Juniper Networks, which HPE acquired last year. In July, AMD and Anthropic said they would deploy up to 2 gigawatts of Instinct chips in Helios racks, with the first gigawatt starting in the first half of 2027.
What did HPE change in its networking forecast?
HPE now expects Networking segment revenue to grow between the high teens and the low 20s percent in fiscal 2027, the company said in a release filed with the SEC for its Networking Investor Day. HPE called that a raise but didn't give the previous figure. It expects the segment's operating margin to stay in the mid-to-high 20s percent range from fiscal 2027 through fiscal 2029.
Over the longer run, HPE now projects Networking revenue to grow at a high-teens percent compound annual rate from fiscal 2026 through fiscal 2029. In the third quarter of fiscal 2026, the segment brought in $2.9 billion with a 22.0% operating margin.
HPE also gave compound annual growth targets through fiscal 2029 for each of the four businesses inside Networking. Unlike the segment-wide target, the release doesn't name a starting year for these.
| Business | Q3 fiscal 2026 revenue | Target compound annual growth rate through fiscal 2029 |
|---|---|---|
| Campus & Branch | $1.4 billion | High single digits |
| Routing | $788 million | Low-to-high 20s percent |
| Data Center Networking | $382 million | Low-to-high 50s percent |
| Security | $281 million | High single digits |
HPE said it expects to grow faster than its markets and gain share over the next three years in Data Center Networking, Routing, and Campus & Branch. "AI is reshaping the technology stack, making the network more strategic and driving significant new demand from enterprises and service providers," said Rami Rahim, who runs HPE's networking business.
To keep up with demand going into fiscal 2027, HPE said it doubled its networking supply purchase commitments from the prior quarter in its fiscal third quarter.
How much does HPE expect to save from Juniper?
HPE now expects $800 million in annual run-rate cost savings from the Juniper deal by the end of fiscal 2028. Its previous target was at least $600 million.
Juniper's gear is also behind another recent HPE deal. Oracle (ORCL) agreed in September to deploy Juniper routers and switches in its AI data centers, and HPE gave Oracle a warrant for 4.16 million HPE shares at a penny each, with vesting tied to Oracle's purchases.
What are the stocks doing?
HPE closed at $61.49 on Tuesday. AMD traded at $609.71 in premarket trading as of 9:18 a.m. ET, up 0.4% from its $607.57 close.
