HPE reported record quarterly revenue of $10.7 billion in Q2 2026, up 40 percent year over year, with networking revenue reaching $2.7 billion and AI systems orders hitting $1.8 billion.
CEO Antonio Neri used the results to defend the company's $14 billion acquisition of Juniper Networks, which closed in mid-2025 after months of regulatory delay and investor skepticism about the price.
Enterprise networking has been under structural pressure for several years. The rise of cloud and software-defined infrastructure shifted budget and attention away from traditional networking hardware vendors toward software and services. At the same time, AI infrastructure buildouts have created new demand for high-throughput, low-latency networking that connects accelerators, storage systems, and data centers. That demand has revived interest in vendors that can offer both hardware and intelligent management software across campuses, branches, and data centers.
The Juniper acquisition was an explicit bet on that shift. Rather than building its networking capabilities from scratch, HPE chose to acquire them, highlighting a deliberate build-vs-buy decision that gave it Juniper's switching and routing portfolio alongside Mist AI, Juniper's AI-driven network management platform. The integration of Mist with HPE's existing Aruba wireless networking business is now producing what the company calls a "self-driving network," which Neri described as a deployed reality rather than a roadmap item.
The broader argument Neri made on the earnings call is that AI demand is no longer limited to hyperscalers and specialized infrastructure providers. He described it as expanding into traditional enterprise accounts deploying agentic AI and inferencing workloads, which require upgraded networking, storage, and compute. If that expansion is real and not just a demand pull-forward, it extends HPE's addressable market considerably. HPE's decision to pull forward its fiscal 2028 financial targets to fiscal 2026 reflects that confidence, though Neri acknowledged ongoing supply constraints in memory and networking components.
What the quarter signals more broadly is that AI infrastructure spending is reaching networking vendors in a more durable way than some analysts expected. The initial wave of AI investment concentrated heavily on compute (GPUs and accelerators) with networking often treated as an afterthought. HPE's results suggest that dynamic is shifting, and that vendors able to offer managed, software-driven networking alongside hardware are better positioned than pure-hardware players to capture the next phase of enterprise AI buildout.
