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Wall Street believes that the enterprise infrastructure market is expected to see a robust investment cycle. This comes amidst AI workloads, inference applications, and networking upgrades fueling demand for servers and data-center infrastructure. As a result, Hewlett Packard Enterprise Company (NYSE:HPE) continues to benefit from increased demand throughout its Cloud & AI and Networking businesses.
Hewlett Packard Enterprise Company (NYSE:HPE) posted strong Q3 2026 revenue of $12.2 billion, reflecting a rise of 34% YoY, with GAAP operating profit rising by 464%. While the strength remained broad-based, Cloud & AI and Networking saw strong performances. Cloud & AI revenue went up by 25.4% to $9 billion, thanks to the 35.3% growth in server revenue to $6.8 billion. Networking revenue went up by 74.9% to $2.9 billion, while Data Center Networking revenue more than doubled to $382 million.
Investors seem to have noticed that growth has been translating into profitability. In Q3 2026, non-GAAP operating margin saw an expansion to 16.2% from 8.5% a year prior, while Cloud & AI operating margin touched 17%, reflecting an increase from 7%. The company also upped its FY 2026 revenue-growth outlook to 34% - 37%. Therefore, it expects at least $3.75 billion in FCF.
The demand outlook is another critical tailwind. Orders went up by 42% in Q3 2026, highlighted Truist Securities. This surpasses pro forma revenue growth and builds a backlog, which offers visibility for several quarters ahead.